What Do We Know About Vice President Harris’ Tax Proposals?

July 26, 2024

Since President Joe Biden withdrew from the 2024 presidential race on July 21, focus has shifted to Vice President Kamala Harris as the presumptive Democratic nominee. The Democratic National Convention, where the candidates and the official party platform will be approved, is two weeks away, and the final tax proposals are far from set. However, based on comments Harris has made in the past, from her time as a senator from California, during her 2020 campaign for president, and during her tenure as vice president, there are some clues into her views on taxes and potential policy proposals.

What do we know so far?

In two early campaign speeches on July 24, Harris focused on the pillars of the Biden administration’s “care economy” policies, including housing assistance and investments in child care and elder care. These priorities are consistent with tax policies she has advocated in the past as a senator and as a 2020 presidential candidate, and they tie into aspects of the Biden tax plans. So far, she has continued to endorse Biden’s policies and has not mentioned the more ambitious economic policies she campaigned on in 2020.

It is clear that Harris, like President Biden, has favored increasing taxes on corporations and the wealthy and giving refundable tax credits to those in the bottom tax bracket. However, in 2020 her specifics were different from the Biden plans, leaving taxpayers wondering what Harris’ forthcoming tax proposals might include. Questions include whether or not Harris will stick with Biden’s pledge not to raise taxes on those making less than $400,000,¹ whether she will push for higher corporate tax rates, and whether she will pursue her 2020 proposals for increased estate tax revenue and a surtax on taxpayers making more than $100,000, which would pay for certain of her spending priorities. Here are some highlights of her past positions on tax issues.

Individual Income Tax Rates

As a senator, Harris voted against the Tax Cuts and Jobs Act (TCJA) in 2017. She is not likely to favor extending it as is. The question is whether she will favor allowing the whole TCJA to expire, or whether she will instead adopt President Biden’s proposal to retain those tax cuts for taxpayers with less than $400,000 in income. She has not personally proposed a wealth tax, but the so-called “Billionaire’s Tax,” a tax on some unrealized appreciation in assets held by taxpayers with more than $100 million, was part of the administration’s Green Book this year and may well be on the table again, although subject to resolution of the issue of whether it is constitutional.²

Raising the Corporate Income Tax Rate

In her 2020 campaign, Harris proposed raising the corporate tax rate to 35%, up from its then and current level of 21%. Biden’s proposal this year was to raise it to 28%. This contrasts with the Republican proposals that favor reducing it to 15%. While the precise rate may remain uncertain, this Democratic tax proposal is likely to make the platform.

Capital Gains Tax Rates

Harris’ 2020 proposal was to increase the tax on capital gains to the same rates as ordinary income, although it was not clear at the time if there would be an exemption for certain lower income tax brackets. What made it into the Biden administration’s proposals was an increased capital gains rate only for taxpayers with income in excess of $1 million. It seems reasonable to expect some version of this proposal in a Harris tax plan.

Refundable Tax Credit for Families

As a presidential candidate in 2020, Harris proposed the LIFT (Livable Incomes for Families Today) the Middle-Class tax credit, a refundable tax credit for low- and middle-income taxpayers designed to address the rising cost of living. The credit would have been worth $3,000 for single taxpayers and $6,000 for married taxpayers filing jointly. The Biden administration went in the direction of refundable child tax credits during the pandemic via the American Rescue Plan (ARP). This had a limited duration, but it is reported that the child poverty rate fell to a historic low during the period in which that credit was in place.³ The primary difference is that the LIFT tax credit would benefit taxpayers without children and those with children aged 18 to 24. It will be interesting to see if the LIFT credit or a different version of the ARP credit returns in proposals from the Harris campaign.

Tax Credit for Renters

In 2018, then Senator Harris proposed a refundable tax credit for taxpayers making less than $100,000 and paying more than 30% of their income for rent and utilities. It was hailed by some as a way to blunt the rising cost of living and was criticized by others as a potential incentive for property owners to increase rents even further. Given the lack of progress for that proposal in 2018, it is not clear that this would be revived for the presidential campaign. Her LIFT the Middle-Class tax credit may be the replacement for this earlier proposal — it appears to be aimed at the same group of taxpayers.

4% Income Tax Surcharge

As a presidential candidate in 2020, the proposed funding for Harris’ Medicare for All plan included a 4% “premium” (essentially an income-based surtax rate) on taxpayers with income over $100,000. There has been much less talk of Medicare for All during this election cycle so far, so the fate of this proposal is currently unknown.

Unspecified Changes to the Estate Tax

As a candidate for president in 2020, Harris proposed to fund an increase in teacher compensation by changing the estate tax to raise the necessary $315 billion for her plan. There were no specifics on what changes she would make to the workings of the current estate tax to reach that goal. It is unlikely that raising the rates alone would be enough to generate the intended revenue, as $315 billion is nearly ten times the amount of estate tax revenue from 2022, the most recent year for which data is available. As noted, she voted as a senator against the TCJA in 2017 and is therefore unlikely to favor extending its estate tax provisions, including the bonus exemption. It is reasonable to anticipate a plan to increase revenue from the estate tax, but it is not clear whether it will exceed the Biden plan to let the bonus exemption sunset and increase the tax on those with more than $100 million.

Financial Transactions Tax

During her 2020 presidential bid, Harris supported a financial transactions tax on stock trades, bond trades and derivative transactions. The rates under discussion were 0.2% on stock trades, 0.01% on bond trades and 0.002% on derivatives.

As vice president, Harris has supported the Biden administration tax proposals, including casting the deciding vote in the Senate for the Inflation Reduction Act. The next few weeks leading up to the Democratic National Convention may be filled with policy proposals and campaign pledges. As her platform emerges, it will be interesting to see whether her views on taxes have evolved over her tenure as vice president.