Just a reminder of what Harris's published tax plan will look like. This information is taken from the Tax Foundation.
taxfoundation.org
VP Harris’s Tax Policy Ideas: Details and Analysis
On tax policy, Harris carries forward much of President Biden’s FY 2025 budget, including higher taxes aimed at businesses and high earners. She would also further expand the child tax credit (CTC) and various other tax credits and incentives while exempting tips from income tax.
taxfoundation.org
Major business provisions modeled:
- Increase the corporate income tax rate from 21 percent to 28 percent
- Increase the corporate alternative minimum tax introduced in the Inflation Reduction Act from 15 percent to 21 percent
- Quadruple the stock buyback tax implemented in the Inflation Reduction Act from 1 percent to 4 percent
- Make permanent the excess business loss limitation for pass-through businesses
- Further limit the deductibility of employee compensation under Section 162(m)
- Increase the global intangible low-taxed income (GILTI) tax rate from 10.5 percent to 21 percent, calculate the tax on a jurisdiction-by-jurisdiction basis, and revise related rules
- Repeal the reduced tax rate on foreign-derived intangible income (FDII)
Major individual, capital gains, and estate tax provisions modeled:
- Expand the base of the net investment income tax (NIIT) to include nonpassive business income and increase the rates for the NIIT and the additional Medicare tax to reach 5 percent on income above $400,000
- Increase top individual income tax rate to 39.6 percent on income above $400,000 for single filers and $450,000 for joint filers
- Tax long-term capital gains and qualified dividends at 28 percent (as opposed to 39.6 percent as in the Biden budget) for taxable income above $1 million and tax unrealized capital gains at death above a $5 million exemption ($10 million for joint filers)
- Limit retirement account contributions for high-income taxpayers with large individual retirement account (IRA) balances
- Tighten rules related to the estate tax
- Tax carried interest as ordinary income for people earning more than $400,000
- Limit 1031 like-kind exchanges to $500,000 in gains
- Exempt tipped income from income taxation for occupations where tips are currently customary
- Expand the Section 195 deduction limit for startup expenses from $5,000 to $50,000.
Major tax credit provisions modeled:
- Revive and make permanent the American Rescue Plan Act (ARPA) child tax credit (CTC) and increase the CTC for newborns to $6,000 in the first year of life
- Permanently extend the ARPA earned income tax credit (EITC) expansion for workers without qualifying children
- Provide a $25,000 tax credit for first-time homebuyers over four years
