As the 2024 election heats up, Democratic presidential nominee Kamala Harris has outlined several key economic proposals aimed at reshaping taxes, housing, and small business support. One of the most notable aspects of her platform is her approach to capital gains taxes, housing affordability, and expanding financial relief for families and businesses.
Capital Gains Tax Proposal
Kamala Harris’s capital gains tax plan has drawn attention, particularly from investors. She proposes a 28% tax rate on long-term capital gains for individuals making over $1 million annually, raising the rate from the current 20%. This change is less aggressive than President Biden’s proposed 39.6% long-term capital gains tax rate for the same group.
In addition, Harris plans to increase the Net Investment Income Tax (NIIT) from 3.8% to 5% for top earners. Together, these changes would bring the top capital gains tax rate to 33%, the highest since 1978. However, experts note that the effective rate most investors actually pay tends to be lower due to tax strategies like deferring asset sales or capitalizing on lower brackets. This approach aims to balance raising revenue while not deterring investment.
Small Business Support
Harris is also looking to help small businesses by significantly expanding the startup-expense deduction. Currently capped at $5,000, Harris wants to raise this to $50,000 to allow entrepreneurs to reduce their initial costs. This would enable businesses to recover expenses faster and encourage economic growth.
Child Tax Credit and Relief for Families
In an effort to provide further financial relief, Harris has proposed restoring the expanded child tax credit, which was put in place during the COVID-19 pandemic. Under her plan, the credit would increase to up to $6,000 for middle- and low-income families during the first year of a child’s life. This follows the 2021 tax credit of $3,600 per child, which expired at the end of that year.
Affordable Housing Goals
Housing affordability is a major focus for Harris. She aims to build 3 million new housing units to alleviate the housing crisis. Additionally, she proposes tax incentives to help first-time homebuyers, including $25,000 in down-payment assistance. This plan is designed to make homeownership more accessible for middle- and low-income Americans.
Grocery Price Controls and Corporate Accountability
Harris has also made headlines by proposing a federal ban on price gouging in the grocery industry, modeled after state-level price control laws typically used during emergencies. Her plan includes scrutinizing mergers between large food companies, ensuring that market consolidation doesn’t lead to unfair price hikes.
Conclusion
Kamala Harris’s economic proposals offer a blend of progressive taxation, business support, and family-focused financial relief. By raising capital gains taxes, expanding small business deductions, and addressing the housing crisis, Harris is aiming to create a fairer tax system while ensuring continued investment in America’s economy. However, the success of these policies will depend on congressional approval, and with the election looming, it remains to be seen how her plans will resonate with voters and investors alike.