Skip to content 
Vice President and presumptive Democratic presidential nominee Kamala Harris has a history of supporting more substantial tax increases on businesses and individuals compared to President Biden. While both have targeted their proposed tax hikes at businesses and high earners, key differences in their past tax ideas highlight where Harris may take her tax policy platform in the 2024 campaign.
Key Questions for 2024
1. Will Harris double down on more aggressive tax increases than President Biden?
2. Is Harris open to stepping away from Biden’s $400,000 tax pledge?
3. How would a President Harris approach the Trump-Biden tariffs levied on China and other trading partners?
Additionally, Harris will need to clarify her stance on the upcoming expirations of the 2017 Tax Cuts and Jobs Act (TCJA) and address the unsustainable trajectory of the federal debt.
Harris’s Tax Proposals in the Past
In her 2020 campaign and as a senator from California, Harris proposed multiple changes to the tax code, including:
– Raising the top marginal income tax rate on the top 1 percent to 39.6 percent.
– Implementing a 4 percent “income-based premium” on households making more than $100,000 annually to fund her version of “Medicare for All.”
– Creating a $3,000 refundable tax credit ($6,000 for married couples filing jointly) for low- and middle-income taxpayers (the LIFT Act).
– Raising capital gains tax rates to ordinary income tax rates, though it is unclear if this would apply only to a subset of taxpayers.
– Raising the corporate income tax rate from 21 percent up to 35 percent.
– Expanding the estate tax.
– Imposing a financial transaction tax (FTT) on stock trades at 0.2 percent, bond trades at 0.1 percent, and derivative transactions at 0.002 percent.
– Proposing $2,000 per person per month for pandemic relief in mid-2020, totaling about $21 trillion, one of the largest aid proposals.
– Creating a tax credit for rent payments for renters earning less than $100,000 and spending over 30 percent of their income on rent and utilities.
Comparing Harris’s Proposals to the Biden-Harris Administration
While Harris’s campaign proposals often lacked detail, they shared similarities with the policies included in the fiscal year 2025 budget proposed by the Biden-Harris administration. However, key differences exist:
– Corporate Tax Rate: Harris proposed a 35 percent rate, while the FY 2025 budget targets 28 percent.
– Capital Gains Taxes: Harris was unclear on the application, while the FY 2025 budget targets individuals earning over $1 million.
– Medicare for All: Harris proposed a 4 percent tax on incomes above $100,000, whereas Biden avoided such a proposal.
– LIFT the Middle-Class Act: Harris’s new refundable tax credit contrasts with the FY 2025 budget’s focus on expanding the child tax credit.
– Financial Transaction Tax: Proposed by Harris, but not included in the FY 2025 budget.
– International Tax System: Harris was silent, whereas the FY 2025 budget proposes a significant overhaul.
– Minimum Tax on High-Wealth Individuals: Included in the FY 2025 budget but not in Harris’s proposals.
– 2017 TCJA: Harris voted against it, while the FY 2025 budget proposes extending provisions for those earning under $400,000.
The $400,000 Pledge
President Biden has consistently pledged not to raise taxes on households earning under $400,000. While Harris has supported this pledge, her elevation to the Democratic nominee offers an opportunity to rethink it. The pledge limits tax reform options, complicates the tax code, and excludes corporate tax increases. By moving away from this pledge, Harris could pursue broader policy options for a more rational tax policy.
The Trade War
Former President Trump’s tariffs on imports have been largely retained by the Biden-Harris administration. Harris has previously criticized these tariffs, referring to them as a “tax on American consumers.” As a nominee, Harris would have the opportunity to lift these tariffs, potentially boosting the economy and after-tax incomes for lower- and middle-income households.
Conclusion
As a US senator and 2020 presidential candidate, Harris supported steeper tax hikes and more aggressive redistribution than President Biden. Her past tax policy stances raise questions about how she might diverge from the Biden-Harris administration’s policies, especially concerning tax hikes, the $400,000 pledge, and trade tariffs. As the campaign unfolds, these positions will likely become clearer, offering insight into Harris’s potential economic impact.
