As she continues to flesh out the details of her economic platform, Vice President Kamala Harris on Wednesday called for raising the capital gains tax to 28% for those making more than $1 million a year, offering a smaller increase than that proposed by President Joe. Biden.
The current capital gains tax rate is 20%, and Biden has proposed raising this to 39.6% for top earners. There is an additional investment tax of 3.8% for people with high incomes, which Biden wants to increase to 5%, giving a potential top rate of 44.6%. Harris has not said what she wants to do with the investment tax, but she did in The Wall Street Journal reports that she favors raising it along the lines Biden has proposed, which gives an all-in top rate of 33% for her proposal – more than 10 points lower than Biden’s all-in top rate.
Harris said her proposal strikes a balance between encouraging investment and ensuring wealthy investors generally pay enough taxes. “While we ensure that the wealthy and big corporations pay their fair share, we will tax capital gains at a rate that rewards investments in America’s innovators, founders and small businesses,” Harris said at a campaign event in Portsmouth, New Hampshire.
In addition to the capital gains tax proposal, Harris called for more support for small businesses and entrepreneurs. Harris wants to increase the small business tax deduction from $5,000 to $50,000 and create a standard deduction that can be used by all small businesses.
Harris said she will set a goal of 25 million new small businesses in her first term, surpassing the record of 19 million under Biden. “As president, one of my top priorities will be strengthening America’s small businesses,” she said.