Increases yes, but nothing exaggerated so as not to penalise investments. This seems to be the message that Kamala Harris he launched to businesses and investors from the stage of his rally in New Hampshire, during which he drew a first line of demarcation with the economic policy established by President Joe Biden in his 2025 budget. Translated into simple words: if he becomes president, Harris will increase yes the capital gains tax rate, but the increase will be much softer than the one promised by the current number one in the White House.
Harris: Capital Gains Tax at 28+5%
Currently the capital gains tax is 20%, plus an additional 3,8% tax on top incomes. Biden's proposal called for nearly doubling the rate to 39,6% plus a 5% surtax. Total? 44,6%.
Harris instead decided not to be too cruel, proposing a rate of 28%, plus a 5% surcharge, for a total tax of 33%. An unexpected “softening” – until now the Democratic candidate had always fully embraced Biden's projects – that seems to want to meet the requests of the business community. According to Harris's advisers, in fact, this change will still be able to keep the commitment to make businesses and the wealthy pay more taxes without excessively penalize investments.
While Harris, like Biden, still favors taxing wealthier individuals and corporations at higher rates, she believes a lower capital gains tax would incentivize investors to put more money into startups and small businesses, the same advisers note.
“My vision of an economy of opportunities is one where everyone can compete and have a real chance to succeed – where everyone, regardless of who they are and where they start, can build wealth, including intergenerational wealth,” Harris said in New Hampshire.
He added: “I believe that American small businesses are an essential foundation for our entire economy.”
$50 tax deduction for start-ups
Harris also announced a new proposal that would offer small businesses get a $50.000 tax break for start-up costs, a figure 10 times higher than the current level of 5 thousand dollars.
The eyes of the wealthiest voters, but also of the big Democratic donors, are now focused on another proposal, that of tax unrealized capital gains for living individuals with net worths of more than $100 million (which rises to $5 million at death). This would mean that the wealthiest taxpayers would pay taxes on the increase in value of their assets each year, even if they didn't sell them. The proposed minimum tax rate for this income would be 25%.
Finally, let us remember that in economic plan presented In August, the Democratic candidate proposed raising the corporate tax rate (the so-called corporate tax) to 28%, compared to the current rate of 21% set by Trump in 2017, and has decided to go all-in on the middle class, proposing a federal ban that will require large companies not to increase the cost of their products above a certain threshold and measures to prevent pharmaceutical companies from increasing the price of certain drugs. Harris has also promised the elimination of taxes on tips (also proposed by Trump who, not surprisingly, accuses her of plagiarism), a subsidy of 25 thousand dollars for the purchase of a first home, 6 thousand dollars for newborns up to one year of age and the restoration of the Child tax credit, a measure wanted by Biden and expired in 2021.
