Vice President Kamala Harris is set to propose a smaller increase in taxes on capital gains during an upcoming economic speech in New Hampshire. This proposal diverges from President Joe Biden's plan outlined in his 2025 budget. Currently, the capital gains tax rate stands at 23.8% for higher earners and is paid when investments are sold or gains are realized. Biden's budget suggests raising this rate to 39.6% for households with taxable income over $1 million, a move that Harris deems too high.
Harris believes that a lower capital gains rate would encourage investors to channel more funds into startups and small businesses. She also supports letting the Trump-era tax cuts for the wealthy and big corporations expire to allocate resources towards targeted programs for families and small businesses. Biden's budget includes other tax hikes on the affluent, such as raising the top marginal income tax rate to 39.6% and imposing a 25% minimum income tax on households with over $100 million in net worth.
The decision to propose a smaller tax increase comes as Harris aims to position herself as more moderate in certain economic policy aspects while still endorsing elements of a populist agenda. This includes initiatives like a $25,000 credit for first-time homebuyers, a $6,000 child tax credit for newborns, and federal inquiries into retail grocery pricing.
Throughout the lead-up to the election, Harris has aligned with the Biden administration's policies, which injected trillions of dollars in government spending into the economy amidst soaring inflation rates. However, some Democrats have urged her to delineate her stance from the current president to establish a distinct identity as a forward-looking candidate.
