Vice President Kamala Harris has recently proposed a significant tax policy change that could impact households with an annual income of $1 million or more. The proposal includes a 28% tax on long-term capital gains, which is lower than the 39.6% rate outlined in President Joe Biden’s 2025 fiscal year budget.
During a rally in North Hampton, New Hampshire, Harris stated, “We will tax capital gains at a rate that rewards investment in America’s innovators, founders, and small businesses.” This announcement marks a departure from Biden’s economic platform and highlights Harris’ efforts to differentiate herself as the Democratic presidential nominee.
Currently, long-term capital gains, which are assets held for over a year, are taxed at a maximum rate of 20%. Harris’ proposal aims to increase taxes on households with higher incomes, with a focus on incentivizing investment in American businesses.
While Harris has aligned herself with many of Biden’s economic proposals, some aspects of her tax plan have faced criticism from within the Democratic Party. Rep. Ro Khanna expressed concerns about the potential unintended consequences of taxing unrealized gains, particularly for startup entrepreneurs.
As Harris navigates her economic stance, her Republican opponent, former President Donald Trump, has criticized her policies and positioned himself as the candidate best suited for the U.S. economy. In response, Harris has introduced additional plans to support small businesses, such as a $50,000 tax deduction for startup expenses, which is a significant increase from the current level.
The debate over tax policies and economic strategies is likely to continue as the presidential campaigns unfold. Harris’ proposal could have far-reaching implications for households with higher incomes, as well as for the broader business and economic landscape. It remains to be seen how this tax plan will be received by different stakeholders and how it may shape the political discourse leading up to the election.
