TLDR:
Harris proposes raising corporate tax rate to 28% from 21%
This would partially reverse Trump’s 2017 tax cuts
The move aims to fund Harris’ economic proposals
It could reduce the deficit by $1 trillion over a decade
Trump has vowed to make his tax cuts permanent and potentially lower rates further
Vice President Kamala Harris has unveiled a proposal to raise the corporate tax rate to 28% from its current 21%, marking her first major revenue-raising policy as the Democratic presidential nominee.
The plan, announced on August 19, 2024, aims to fund Harris’ economic proposals and draw a clear contrast with her Republican opponent, former President Donald Trump.
Harris’ campaign spokesperson, James Singer, stated that the proposed tax increase is
“a fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share.”
The move would partially roll back the 2017 Tax Cuts and Jobs Act, which was a signature piece of legislation during Trump’s presidency that reduced the corporate tax rate from 35% to 21%.
The proposed 28% rate aligns with President Joe Biden’s most recent budget proposal and is lower than the 35% rate Harris had suggested during her 2020 presidential campaign.
According to the nonpartisan Congressional Budget Office, each percentage point increase in the corporate rate corresponds to approximately $100 billion in revenue over a decade. The Committee for a Responsible Federal Budget estimates that raising the rate to 28% could reduce the deficit by $1 trillion over ten years.
Harris’ economic platform, unveiled earlier, includes measures to make housing, groceries, healthcare, and child-rearing more affordable.
It proposes tax relief for over 100 million middle-class and lower-income Americans, primarily by restoring the enhanced child tax credit from the American Rescue Plan Act and creating a new $6,000 credit for children in their first year of life. The campaign has not yet provided a comprehensive cost estimate for these proposals.
In contrast, Trump has expressed his intention to make his tax cuts permanent and potentially lower rates further if re-elected. He recently stated that he would like to reduce the corporate tax rate to as low as 15%, though he acknowledged the difficulty of achieving such a significant reduction.
The proposed tax increase is likely to face opposition from Republicans, meaning its implementation would likely require Democratic control of both the House and Senate. However, the expiration of many portions of the Trump tax cuts at the end of 2025 could provide leverage for negotiations on tax policy in the coming year.
Harris has pledged to maintain President Biden’s promise not to raise taxes on individuals making $400,000 or less annually. Her campaign emphasizes creating an “opportunity economy” focused on advancing economic security, stability, and dignity for the middle class.
With both the Senate and House of Representatives up for grabs in the November 5 election, the feasibility of implementing this tax proposal will depend significantly on the outcome of these races.
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