Harris to propose tenfold startup tax incentive increase she says will spur small business creation | AP News
Summary of the Kamala Harris Tax Position
1. Capital Gains Tax:
- Harris proposes increasing the long-term capital gains tax rate to 28% for wealthy Americans.
- This is lower than Biden's proposal, which suggested raising it to 39.6% for households with taxable income over $1 million.
2. Corporate Tax Rate:
- Harris proposes increasing the corporate tax rate to 28%, up from the current 21%.
- This aligns with Biden's previous proposals.
3. Small Business Tax Incentives:
- Harris proposes a tenfold increase in federal tax incentives for small business startup expenses, from $5,000 to $50,000.
- This is a new proposal not previously outlined in Biden's plans.
4. Billionaire Minimum Income Tax:
- Harris supports Biden's proposed 25% minimum income tax on households with more than $100 million in net worth.
5. Stock Buyback Tax:
- Harris favors quadrupling the tax on stock buybacks to 4%, aligning with Biden's proposal.
6. Income Tax Rates:
- Harris supports raising the top marginal income tax rate to 39.6%, up from 37%, which is consistent with Biden's proposal.
7. Tax on Tips:
- Harris proposes ending the federal income tax on tips, a new proposal not previously part of Biden's plan.
8. Child Tax Credit:
- Harris proposes a permanent expansion of the child tax credit to as much as $3,600, up from $2,000.
9. Other Proposals:
- Harris suggests a $25,000 credit for first-time homebuyers and a $6,000 child tax credit for newborns.
- She also proposes developing a standard deduction for small businesses to simplify tax filing.
The main variances from Biden's proposals are the lower capital gains tax rate, the significant increase in small business tax incentives, and the elimination of federal income tax on tips. Harris seems to be positioning herself as more moderate on some economic policies while still maintaining a focus on taxing wealthy individuals and corporations at higher rates.
Fiscal Impact of Proposed Policies
However, we can infer that some of these policies would likely have significant budget implications:
1. The increase in small business tax incentives (from $5,000 to $50,000) would likely reduce tax revenue, potentially by a substantial amount if Harris reaches her goal of spurring 25 million new small business applications over four years.
2. The proposed elimination of federal income tax on tips would also reduce tax revenue, though the exact amount isn't specified.
3. The permanent expansion of the child tax credit to up to $3,600 would increase government expenditures.
4. The proposed $25,000 credit for first-time homebuyers and $6,000 child tax credit for newborns would also increase government spending.
5. On the revenue side, the increase in capital gains tax (though lower than Biden's proposal), the increase in corporate tax rate, and the quadrupling of the stock buyback tax would all potentially increase tax revenue.
Without specific numbers or projections, it's difficult to determine the net fiscal impact of these policies. It's also worth noting that the implementation of these policies would likely require congressional approval, which could lead to modifications of the proposals and their potential budget impacts.
For a more accurate assessment of the cost and budget impact of these policies, we would need a detailed economic analysis, which is not provided in the given articles. If you need more precise information on the fiscal implications, it would be advisable to look for expert economic analyses or official budget projections, if available.
Voters may be concerned about the lack of detailed cost or budget analysis for these policy proposals. It is indeed important for candidates to provide thorough fiscal projections when proposing significant policy changes. The absence of such analysis can make it difficult for voters to fully understand the potential impacts of these policies.
There are a few factors to consider:
1. Early stage proposals: Sometimes, candidates present policy ideas in broad strokes early in a campaign, with the intention of providing more detailed plans (including cost analyses) as the election nears.
2. Complexity of analysis: Accurate budget projections for complex policies can take considerable time and resources to produce, which may not always align with campaign timelines.
3. Political strategy: Candidates sometimes prioritize communicating the potential benefits of their policies before delving into the fiscal details.
4. Media reporting: It's possible that more detailed analyses exist but weren't included in these particular news articles.
Voter's concern that this is irresponsible policymaking is well-taken. Voters and the media often play a crucial role in demanding more detailed information, including cost projections and funding plans, from candidates as campaigns progress.
The concern about "vote buying" through generous promises without clear funding plans is a longstanding issue in democratic politics. It's up to voters, journalists, and policy experts to scrutinize proposals and demand more detailed information to make informed decisions.
If you're interested in a more thorough analysis of these proposals, you might look for:
1. Official campaign documents that may contain more detailed projections (none are found at the Harris Walz web site https://kamalaharris.com/)
2. Analyses from nonpartisan economic policy institutes - nothing yet.
3. Future debates or town halls where candidates might be pressed on these details -stay tuned.
Ultimately, it's crucial for voters to have access to comprehensive information about policy proposals, including their potential fiscal impacts, to make informed decisions at the ballot box.
Harris to break with Biden on capital gains tax, proposing a smaller increase | CNN Politics
Washington CNN —
Vice President Kamala Harris proposed increasing the long-term capital gains tax rate to 28% for wealthy Americans during an economic speech in New Hampshire on Wednesday, breaking with the policy laid out by President Joe Biden in his 2025 budget by suggesting a lower rate.
The current long-term capital gains tax rate – 20%, plus an additional 3.8% tax on higher earners – is paid when an investment is sold, or gains are realized. The Biden budget proposes raising that rate to the top rate he wants to levy on ordinary income – 39.6% – for households with taxable income over $1 million. Harris, the people familiar with the matter say, believes 39.6% is too high.
While Harris still supports taxing the wealthiest individuals and corporations at higher rates – as Biden’s budget also calls for – she believes that a lower capital gains rate would incentivize investors to put more money into startups and small businesses. She has also proposed increasing the corporate tax rate to 28%, up from the current 21% rate set by Trump’s Tax Cuts and Jobs Act of 2017.
Advisers said Harris supports allowing many Trump-era tax cuts for the wealthy and big corporations to lapse in favor of funding more targeted programs for families and small businesses.
“My vision of an opportunity economy is one where everyone can compete and have a real chance to succeed - where everyone, regardless of who they are, where they start, can build wealth, including intergenerational wealth,” Harris said in New Hampshire.
She added: “I believe America’s small businesses are an essential foundation to our entire economy.”
Biden’s budget proposal also contains other tax increases on the wealthy, including raising the top marginal income tax rate to 39.6%, up from the 37% rate established by the 2017 Trump tax cuts law, and levying a 25% minimum income tax on households with more than $100 million in net worth.
Harris said Wednesday that she also supports the latter measure – known as the Billionaire Minimum Income Tax – though various efforts to levy such taxes have failed to make it through Congress. Under Biden’s budget proposal, unrealized gains on assets would also be subject to the minimum tax, unlike current law.
Plus, she is in favor of quadrupling the tax on stock buybacks to 4%. That levy was created by the Inflation Reduction Act, which the Democrats pushed through Congress in 2022.
The move comes as Harris attempts to establish herself as more moderate in some areas of economic policy while still embracing some elements of a more populist platform, like a $25,000 credit for first-time homebuyers, a $6,000 child tax credit for newborns and federal investigations into retail grocery pricing.
During a truncated sprint toward Election Day, Harris has embraced the policies of the Biden administration, which ushered trillions of government spending into the American economy, which also grappled with inflation at its highest in decades. Her remarks on Wednesday, part of a policy rollout that came after criticisms of the lack of policy from her campaign since Biden dropped from the race in July, represented the first time Harris has publicly diverged from Biden administration policy.
Democratic strategist James Carville wrote in The New York Times that, in order to brand herself as a forward-looking candidate, Harris would need to establish some distance between Biden’s policies and her own.
As part of the rollout of her economic policy in recent days, Harris has proposed a major, 10-fold tax deduction for small businesses - from up to $5,000 to up to $50,000 - and vowed to pursue measures that would cut red tape that would make such businesses easier to operate.
She has also pushed for a federal ban on price gouging and a permanent expansion of the child tax credit to as much as $3,600, up from $2,000.
The vice president has also vowed to end the federal income tax on tips, sparking Trump’s ire because he has made a similar campaign promise. Tips would remain subject to payroll taxes under Harris’ plan.
This story has been updated with additional reporting.
Updated 2:00 PM PDT, September 3, 2024
WASHINGTON (AP) — Vice President Kamala Harris plans to propose on Wednesday a tenfold increase in federal tax incentives for small business startup expenses, from $5,000 to $50,000, hoping to help spur a record 25 million new small business applications over her four-year term should she win the presidency in November.
She’s set to unveil the plan during a campaign stop in the Portsmouth area of New Hampshire — marking a rare deviation from the Midwestern and Sunbelt battlegrounds the Democrat has focused on in her race against former Republican President Donald Trump.
A Harris campaign official, who spoke on the condition of anonymity to discuss a policy plan that hadn’t been released publicly, said Tuesday the change would cover the $40,000 it costs on average to start a business. The proposal would let new businesses wait to claim that deduction until they first turn a profit, to better maximize its impact lowering their taxes.
Such changes would likely require congressional approval. But a series of tax cuts approved during the Trump administration are set to expire at the end of next year, setting up a scenario where lawmakers may be ready to consider new tax policies. The proposal can help Harris show her support for entrepreneurs even as she’s called for higher corporate tax rates.
Since President Joe Biden dropped his reelection bid and endorsed Harris in July, the vice president has focused on campaigning in the “ blue wall ” states of Michigan, Wisconsin and Pennsylvania that have been the centerpiece of Democratic campaigns that have won the White House in recent decades.
She’s also frequently visited Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which last voted Democratic in a presidential race in 2008 but which she’s still hoping to flip from Trump. Biden won New Hampshire by 7 percentage points in 2020, though Trump came far closer to winning it against Hillary Clinton in 2016.
“The cost of living in New Hampshire is through the roof, their energy bills are some of highest in the country, and their housing market is the most unaffordable in history,” Trump posted last week on his social media platform.
Harris’ team says securing 25 million new business applications in four years if she wins the White House would exceed the roughly 19 million such applications filed since Biden took office. And those were millions more than the previous four years under Trump. The vice president’s goal would be a record for new small business applications — but records only go back about 20 years.
Applications to start a business don’t always translate to small businesses actually being formed. Still, Harris’ plan could keep new small businesses that do come to fruition from otherwise incurring more debt which, at a time of high interest rates, might help them better succeed.
In the weeks since Harris took over the top of the Democratic ticket, she has offered relatively few major policy proposals — attempting to strike a political balance between injecting new energy into the race and continuing to support many of the Biden administration proposals she helped champion as vice president.
Harris’ small business plan follows her announcing last month proposed steps to fight inflation by working to lower grocery prices, and to use tax cuts and other incentives to encourage homeownership. The vice president has also proposed ending federal taxes on tips to service industry workers, an idea Trump proposed first.
The plan she’s introducing Wednesday further calls for developing a standard deduction for small businesses meant to save their owners time when doing their taxes, and making it easier to get occupational licenses — letting people work across state lines and businesses expand into new states. Harris also wants to offer federal incentives so state and local government will ease their regulations.
In an effort to spur business investment outside urban and suburban hubs, Harris is pledging to launch a small business expansion fund to enable community banks and federal entities to cover interest costs while small businesses are expanding or otherwise creating jobs. Her team says those efforts will focus especially on areas that traditionally receive less investment.
WATCH: Harris debuts small business tax incentive plan at New Hampshire campaign stop
WASHINGTON (AP) — Vice President Kamala Harris used a New Hampshire campaign stop on Wednesday to propose an expansion of tax incentives for small businesses, a pro-entrepreneur plan that may soften her previous calls for wealthy Americans and large corporations to pay higher taxes.
Watch Harris’ remarks in our player above.
Describing small businesses as “an essential foundation to our entire economy,” Harris said she wants to expand from $5,000 to $50,000 tax incentives for startup expenses, with the goal of eventually spurring 25 million new small business applications over four years.
The speech is part of Harris’ effort to strengthen her economic credentials with only two months until the end of the election.
READ MORE: Trump and Harris say they’ll kill taxes on tips. How would that work?
“You’re not only leaders in business. You’re civic leaders,” Harris said. She added, “You are part of the glue and the fabric that holds communities together.”
Harris spoke at the Throwback Brewery in North Hampton, outside Portsmouth, and meet with co-founders Annette Lee and Nicole Carrier. Their brewery got support to open its current location through a small business credit and installed solar panels using federal programs championed by the Biden administration, according to the Harris campaign.
The campaign of Donald Trump, the former president and current Republican nominee, dismissed Harris’ small business plan, noting that the vice president has promised to eliminate a package of tax cuts approved during his administration that are set to expire next year. Trump’s campaign said those cuts “allowed business owners to deduct up to 20 percent of qualified business income,” reduced taxes on new equipment purchases and took steps to bolster small businesses as compared to larger ones.
Before talking about small businesses, Harris addressed Wednesday’s school shooting in Georgia.
“It’s just outrageous that every day, in our country, in the United States of American, that parents have to send their parents to school worried about whether or not their child will come home alive.”
She added, “We’ve got to stop it. It doesn’t have to be this way.”
Harris’ New Hampshire trip is a rare deviation for a candidate who is spending most of her time in Midwest and Sun Belt states with pivotal roles in November’s election.
Since President Joe Biden dropped his reelection bid and endorsed Harris, the vice president has focused on Michigan, Wisconsin and Pennsylvania, which have been the centerpiece of successful Democratic campaigns. She also has frequently visited Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which she hopes to flip from Trump.
Wednesday’s stop comes after Harris marked Labor Day with Monday rallies in Detroit and Pittsburgh and before she heads back to Pittsburgh on Thursday — marking her 10th visit to Pennsylvania in 2024.
Trump has called for lowering the corporate tax rate to 15 percent — a break with Biden who in his budget proposal in March suggested setting the corporate tax rate at 28 percent. Harris has released relatively few major policy proposals in the roughly six weeks since taking over the top of the Democratic ticket, but has not suggested she’s planning to deviate greatly from his administration on tax policy.
The small business plan Harris is presenting has lots that the business community would like. But that contrasts another proposal Harris unveiled last month, where she promised to help fight inflation by working to combat “price gouging” from food producers that she suggests have driven grocery store prices up unnecessarily.
Harris has built her campaign around calls to grow and strengthen the nation’s middle class — and suggested that rich Americans and large corporations should “pay their fair share” in higher taxes.
Both nominees are using the week before their debate to sharpen their economic messages about who could do more for the middle class. Trump will address the Economic Club of New York on Thursday.
Biden, who built his campaign around promoting the middle class, won New Hampshire by 7 percentage points in 2020, but Trump came much closer to winning it against Hillary Clinton in 2016. The Harris campaign says it has 17 field offices operating in coordination with the state Democratic party across New Hampshire, compared to one for Trump’s campaign.
Some of the state’s Democrats were angry that Biden directed the Democratic National Committee to make South Carolina the first state to vote in the party’s presidential primary this year — displacing Iowa’s caucus and a first-in-the-nation primary New Hampshire held for more than a century.
Despite that, New Hampshire pressed ahead with an unsanctioned primary. Though Biden didn’t campaign in it, or appear on the ballot, he still easily won via a write-in drive.
Trump has seized on the primary calendar change, posting on his social media account that Harris “sees there are problems for her campaign in New Hampshire because of the fact that they disrespected it in their primary and never showed up.”
“Additionally, the cost of living in New Hampshire is through the roof, their energy bills are some of highest in the country, and their housing market is the most unaffordable in history,” the former president wrote. “I protected New Hampshire’s First-In-The-Nation Primary and ALWAYS will.”
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