As she continues to fill in the details of her economic platform, Vice President Kamala Harris on Wednesday called for raising the capital gains tax to 28% for those earning more than $1 million a year, offering a smaller increase than the one proposed by President Joe Biden.
The current capital gains tax rate is 20%, which Biden has proposed raising to 39.6% for top earners. There is an additional 3.8% investment tax for those with high incomes, which Biden wants to raise to 5%, producing a potential top rate of 44.6%. Harris did not say what she wants to do with the investment tax, but The Wall Street Journal reports that she favors raising it along the lines Biden has proposed, producing 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 that wealthy investors pay enough in taxes overall. “While we ensure that the wealthy and big corporations pay their fair share, we will tax capital gains at a rate that rewards investment 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 providing more support for small businesses and entrepreneurs. Harris wants to raise the small business tax deduction from $5,000 to $50,000, and create a standard deduction that can be used by all small firms.
Harris said she will set a goal of 25 million new small businesses in her first term, surpassing the record 19 million seen under Biden. “As president one of my highest priorities will be to strengthen America’s small businesses,” she said.