In a break with President Joe Biden, Democratic presidential candidate Kamala Harris called Wednesday for a smaller capital gains tax increase on the rich than he’s proposed.
Harris said she would hike the top total rate on people making more than $1 million to 33 percent, including a special 5 percent surcharge, well below the nearly 45 percent levy Biden has pitched.
“We will tax capital gains at a rate that rewards investments in America’s innovators, founders and small businesses,” she said at a campaign stop in New Hampshire.
“When the government encourages investment, it leads to broad-based economic growth and it creates jobs, which makes our economy stronger.”
Harris had previously endorsed Biden’s slate of tax increases, including his plan to hike the top long-term capital gains rate on the highest earners to 44.6 percent from 23.8 percent.
Biden wants to tax their capital gains, which includes things like appreciation in the value of stocks at ordinary income tax rates, instead of a special preferential rate. He has also proposed raising the top marginal income tax rate to 39.6 percent from 37 percent and increasing a surcharge on high earners to 5 percent from 3.8 percent.
It’s one of nearly $2 trillion in tax increases Biden has proposed on the wealthy.
Harris’ shift towards what her campaign considers a more “moderate” capital gains increase comes ahead of her first debate with former President Donald Trump, and as Republicans try to paint her as a creature of the extreme left.
It also prefaces a major debate next year in Washington over the future of the tax code, when big chunks of Republicans’ 2017 tax cuts will expire, and taxing the rich will be a key issue.
Harris’ rethink of Biden’s plan may disappoint some progressives who have been anxious to more steeply hike taxes on capital gains, a key source of income for people at the very top of the income ladder.
At the same time, though, Biden’s capital gains proposal likely goes well beyond what many congressional Democrats would be willing to support.
It’s also possible that Harris’ plan may still be too much for some Democrats. In 2021, when Democrats controlled Congress and the White House, they considered increasing the capital gains tax rate to 28.3 percent before dropping the idea.
