Harris recommends hiking the corporation tax rate to 28%, pulling back a Trump law.
In order to increase money and pay for her extravagant plans, Vice President Kamala Harris is proposing to hike the business tax rate to 28%.
This is her first significant proposal. A spokesperson for Harris' campaign, James Singer, told media that the senator would support a corporate tax rate of 28%, describing it as “a fiscally conscious way to make sure billionaires and large companies paid their fair share” and return cash to the purses of salaried citizens.
In an email, Singer stated, "As President, Kamala Harris will prioritize building a chance economy for the lower middle class that promotes their well-being economically, stability, and dignity."
According to projections made by the impartial Congressional Research Office, a one basis point rise in the corporation rate would result in around $100 billion in revenue over a ten-year period. If implemented, this policy may raise hundreds of billions of dollars.
Additionally, it would largely undo the landmark legislation signed into law by former President Donald Trump in 2017, which reduced the corporation tax rate from 35% to 21%. In the meantime, Trump declared recently that if elected president, he will substantially reduce taxes, particularly those on corporations.
This action is taken as Harris gradually fills in the blanks on her platform for government over the week of the Democratic conference. She also explains to her detractors how she plans to finance her ambitious plans, which include raising the child tax credit and lowering housing and healthcare costs.
To date, she has not matched her suggestions with pay-fors or offered a cost estimation. In her unsuccessful 2020 presidential campaign, Harris advocated for the complete revocation of Trump's tax cuts, which would have raised the corporate tax rate to 35%. This proposal, however, is less than the 28% corporation tax rate that now exists. Harris's new position is consistent with the greatest recent fiscal strategy from President Joe Biden.
A 28% corporation rate of taxation is sure to anger Republicans, so Harris may require Democratic majority in the House and Senate to pass it through Parliament. But since many other sections of the Trump tax cuts run out at the end of 2025, a possible president Harris would have some negotiating power with the GOP over tax policy matters. This is going to trigger a significant debate in Parliament the following year about which elements of the tax cuts should be extended.
Trump said at an upcoming press conference that economic growth will "destroy" if Republicans "don't renew them or make it impossible to refresh," and that they will be " below enormous stress" to extend his temporary tax breaks next year.
At the same time, Singer used estimates of the effects of Trump's plan to enact tariffs of up to 20% to link the president to a "harsh Project 2025 plan" which would "push up the budget" and "to boost taxation on the lower income population."
