Harris Proposes 28% Capital Gains Tax, Diverging From Biden

Vice President Kamala Harris proposed raising the capital gains tax to 28% for individuals earning over $1 million annually, a more modest increase than President Joe Biden‘s plan.

Harris stated that her proposal balances encouraging investment with ensuring that wealthy investors contribute a fair share in taxes.

“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 Portsmouth, New Hampshire campaign event.

The current capital gains rate is 20%, but Biden has proposed raising it to 39.6% for top earners. Additionally, he seeks to increase the investment tax for high-income individuals from 3.8% to 5%, bringing the potential top rate to 44.6%.

While Harris did not specify her stance on the investment tax, The Wall Street Journal reports she supports increasing it similar to Biden’s proposal. This would result in a top combined rate of 33% under her plan – over 10 points lower than Biden’s proposed top rate.

Profitable assets held for a year or less are taxed at regular income rates, which are set to rise after 2025 unless Congress takes action.

Alongside her capital gains tax proposal, Harris also advocated for increased support for small businesses and entrepreneurs.

“As president one of my highest priorities will be to strengthen America’s small businesses,” Harris said.

Harris outlined plans at her New Hampshire event to raise the small business tax deduction from $5,000 to $50,000 and introduce a standard deduction accessible to all small businesses.

She also announced a goal of creating 25 million new small businesses in her first term, surpassing the record 19 million established under Biden.