Harris vs. Trump on Tax Policy

The Biden-Harris administration has called for raising the top individual income tax rate from 37 percent to 39.6 percent. Harris has not offered detailed plans for the rest of TCJA, though Harris has pledged not to raise taxes on those earning less than $400,000.

Harris wants to restore the temporary expansions of the child tax credit (CTC) and earned income tax credit (EITC) under the American Rescue Plan. The EITC for workers without children would be raised to $1,500. CTC would go from $2,000 per child to $6,000 for newborns, $3,600 for children under 6, and $3,000 for those ages 6–17. She would also make the full CTC benefit available to households earning little or no income.

Low-income families with children would gain $2,750 on average from the combination of the expanded CTC and the additional credit for newborns. The EITC change would give the average household in the bottom two quintiles a tax break of $720.

Harris has proposed expanding the low-income housing tax credit and creating new credits for homebuilding projects in certain low-income communities.

Harris proposes raising the deduction for startup business expenses from $5,000 to $50,000 and simplifying the tax filing process for small businesses.

Harris has also proposed an “America Forward tax credit” for investment “in key strategic industries.” However, the campaign has not yet provided details on how the credit would work.

Harris favors raising the corporate tax rate from 21 percent to 28 percent, a change previously called for by Biden.

Harris has also proposed raising the excise tax on stock repurchases from 1 to 4 percent.

Harris supports raising the tax rate on long-term capital gains to 33 percent (a 28 percent rate plus a net investment income tax rate of 5 percent). Harris also has indicated she supports a new tax on unrealized capital gains tax on the wealthy with a net worth of $100 million.

Since taking office, the Biden-Harris administration has imposed a 100 percent levy on imported electric vehicles (EVs) and levies on batteries, steel, aluminum, solar cells and semiconductors. These tariffs will raise about $11 billion over the next decade. Because the tariffs are more modest than the Trump proposal, our model estimates these tariffs will not have a measurable impact on household incomes.

At an August campaign rally, Harris announced her support for tax-free tips. Her campaign has not released a detailed plan on how the Harris administration would implement the proposal. We scored possible options for exempting tips from tax, finding that few households would benefit.