Capital Gains Tax: Harris Proposes Lower Increase Compared to Biden

Capital Gains Tax Strategy Shift

Vice President Kamala Harris made headlines during her New Hampshire campaign speech by proposing a lower capital gains tax increase compared to President Biden's previous budget. In a bid to appeal to a broader voter base, Harris has outlined her plan to raise the long-term capital gains tax to 28% for earners making $1 million and above, a significant shift from the current rate of 23.6%.

Comparing Harris and Biden

Harris's approach diverges sharply from Biden's proposed increase to 39.6% and the drastic 44.6% percent outlined in a July budget update. During her speech, she emphasized the connection between government support and economic growth, stating, “When the government encourages investment, it leads to broad based economic growth.”

Key Components of Harris's Proposal

• Increase tax deduction for new businesses from $5,000 to $50,000.
• Enhance access to capital for small businesses.
• Support business incubators to stimulate growth.
• Streamline business tax filing processes similar to individual standard deductions.

Harris’s proposal signals a shift toward compromise, potentially appealing to Republican values by presenting a more moderate tax increase on capital gains, an approach deemed necessary for the current political climate.