In a break with President Joe Biden, Democratic presidential candidate Kamala Harris on Wednesday advocated for a smaller capital gains tax increase on the wealthy than he has proposed.
Harris said she would raise the top overall rate for people making more than $1 million to 33 percent, including a special 5 percent levy — well below the nearly 45 percent levy Biden has proposed.
“We will tax capital gains at a rate that rewards investments in American innovators, founders and small businesses,” she said at a campaign rally in New Hampshire.
“When the government stimulates investment, it leads to broad economic growth and creates jobs, which makes our economy stronger.”
Harris had previously voiced support for Biden’s series of tax increases, including his plan to raise the top long-term capital gains rate for the highest incomes from 23.8 percent to 44.6 percent.
Biden wants to tax their capital gains, including things like stock appreciation, at normal income tax rates, rather than a special preferential rate. He has also proposed raising the top marginal income tax rate from 37 percent to 39.6 percent and increasing a surtax on high earners from 3.8 percent to 5 percent.
It’s one of nearly $2 trillion in tax increases Biden has proposed for the wealthy.
Harris’ shift to what her campaign calls a more “moderate” increase in capital gains comes ahead of her first debate with former President Donald Trump, and as Republicans attempt to portray her as a creature of the far left.
It also sets the stage for a major debate in Washington next year over the future of the tax code, when large parts of the Republicans’ 2017 tax cuts are set to expire and taxing the rich will be a major topic.
Harris’ revision of Biden’s plan could come as a disappointment to some progressives eager to further raise the tax on capital gains, a key source of revenue for people at the very top of the income ladder.
At the same time, Biden’s capital gains proposal likely goes far beyond what many Democrats in Congress would be willing to support.
It’s also possible that Harris’ plan will still be too much for some Democrats. In 2021, when Democrats controlled Congress and the White House, they considered raising the capital gains tax rate to 28.3 percent but abandoned the idea.
