Would Kamala Harris Save the Trump-Era Tax Cuts?
In 2017, former U.S. President Donald Trump signed the Tax Cuts and Jobs Act (TCJA) into law. It brought about some significant tax breaks for Americans, such as reducing the top tax bracket from 39.6% to 37%, doubling the standard deduction, reducing estate taxes and more.
These tax cuts are set to expire at the end of 2025, leaving the next president to deal with the outcome of potentially higher taxes on average Americans if nothing is done about them. If Kamala Harris is elected president in November 2024, would she be likely to save or reinstate these tax cuts?
Let’s take a look at what Harris has proposed on her presidential campaign trail.
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Riding Biden’s Agenda
While Harris has not explicitly said she will preserve the TJCA tax cuts, she has said that she plans to reduce taxes for the average middle-class American in her own ways.
Harris has kept in stride with President Joe Biden’s proposals around taxing the rich, for one. While Trump dropped the corporate tax rate from 35% to 21%, Harris falls in line with Biden’s proposal to bring it back up to 28%. She also proposes raising the capital gains tax from 20% to 28% for those making more than $1 million annually.
Learn Next: Trump Wants To Eliminate Income Taxes: Here’s What That Would Mean for the Economy and Your Wallet
Beefing Up the American Rescue Plan
She’s also stated that she plans to build on or beef up aspects of President Biden’s American Rescue Plan, passed in 2021, which includes making permanent the expanded child tax credit (from $2,000 to $3,600), as well as adding a new child tax credit of up to $6,000 for families with a new child in the first year of their life.
Additionally, she would restore the earned income tax credit (EITC), which was around $1,500 for workers without dependent children.
Middle-Class Tax Breaks
Other tax breaks that could positively affect those of lower and middle income is abolishing taxing tips (which Trump was the first to propose) and not raising taxes on anyone making less than $400,000.
Restoring Premium Healthcare Subsidies
Furthermore, though not a tax issue per se, she has promised to try and extend the soon-to-expire premium subsidies of the Affordable Care Act.
A $10,000 Tax Credit for First-Time Homebuyers
In addition, Harris has made some hefty promises to help homebuyers, including a $10,000 tax credit for first-time homebuyers, $25,000 in down payment assistance and tax credits that seem designed to create new housing construction and affordable rental units.
Tariff Taxes
Though not a past tax break, Trump has said that if elected again, he plans to impose a 10% tariff on goods imported from most countries into the U.S. and a 60% tax on goods from China. However Harris refutes this idea, calling it a “sales tax” on Americans.
As usual, most of these tax plans require congressional approval, so not only would Harris need to be elected, there would need to be some changes in the House and Senate to gain a Democratic majority in order to pass these changes.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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