Vice President Kamala Harris has announced a plan to increase the corporate tax rate to 28% from its current 21%, if she becomes the president.
Her campaign made the announcement on Monday by framing the proposal as a key component of her economic strategy, Reuters reported.
James Singer, spokesperson for the Harris campaign, said the plan is designed to be "a fiscally responsible approach to putting money back into the hands of working Americans while ensuring that billionaires and large corporations contribute their fair share."
The proposal would partially reverse one of Donald Trump's significant legislative achievements during his presidency, where he lowered the corporate tax rate from 35% to 21%. Trump has pledged to make these tax cuts permanent if re-elected and recently said he would cut taxes even further.
The nonpartisan Committee for a Responsible Federal Budget said that Harris's proposed tax increase could reduce the U.S. deficit by $1 trillion over the next decade.
However, any changes to the tax code would require congressional approval.
This is uncertain because of the tight race for control of both the Senate and the House of Representatives in the November 5 election.
Harris, running as a Democrat, has reiterated her commitment to uphold President Joe Biden's pledge not to raise taxes on individuals earning $400,000 or less annually.
The proposal to hike the corporate tax rate marks Harris's first significant initiative to generate revenue for the extensive plans she hopes to implement as president.
According to projections from the Congressional Budget Office, each percentage point increase in the corporate tax rate could yield around $100 billion in revenue over a decade.
While Harris's current proposal for a 28% rate represents a more moderate stance than her 2020 campaign's call to fully repeal Trump's tax cuts, it still places her in alignment with President Biden's most recent budget suggestions.
Republicans are expected to strongly oppose the 28% corporate tax rate, which would make congressional approval a potential challenge.
In response to Harris's proposal, Trump warned that Democrats would be under "tremendous pressure" to renew his expiring tax cuts next year. He added that failure to do so would have severe economic consequences.
Singer, however, criticized Trump's economic policy, linking it to the "extreme Project 2025 agenda" and claiming it would exacerbate the deficit and increase taxes on the middle class.
