In a bid to revitalize the economy and alleviate the financial burden on middle and lower-income Americans, US Vice President Kamala Harris has unveiled a comprehensive package of economic proposals. The plan seeks to stimulate economic growth by introducing targeted tax incentives and reforms. Here are the key takeaways:
**Wealth Redistribution**
Harris has reaffirmed her commitment to not increasing taxes on households earning less than $400,000 per year. She has endorsed a significant portion of the $5 trillion tax hike proposed in President Biden’s fiscal 2025 budget, which includes a 25% minimum tax on individuals with fortunes exceeding $100 million, including unrealized capital gains. Additionally, she has suggested raising the long-term capital gains tax rate to 28% for those earning over $1 million annually.
**Corporate Tax Reform**
The Vice President has proposed increasing the corporate tax rate to 28%, partially reversing the 2017 tax law that slashed company tax rates from 35% to 21%. This move is expected to generate $1 trillion in revenue over a decade, but may impact company profits. Notably, large US corporations currently pay an effective tax rate of 16%, significantly lower than their foreign counterparts.
**Family-Friendly Policies**
Harris has retained the proposal to permanently restore the Child Tax Credit to $3,600 per child, up from the current $2,000. She has also introduced a one-time $6,000 bonus credit for families with newborns. Furthermore, she has outlined plans to support affordable housing through tax incentives, including a $25,000 tax credit for first-time homebuyers and a $40 billion “innovation fund” to encourage local governments to build more affordable homes.
**Small Business Boost**
In a departure from President Biden’s economic plan, Harris has proposed a new tax deduction of up to $50,000 for small business start-up costs, aiming to support entrepreneurs and create jobs. This move is particularly significant, given that small businesses have been responsible for 70% of net new jobs created since 2019.
**Childcare and Grocery Prices**
Harris has pledged to ensure that no working family pays more than 7% of their household income on childcare, a significant reduction from the current 19.3% of median family income per child. Additionally, she has vowed to introduce the first-ever federal ban on price gouging on food and groceries, aiming to prevent big corporations from exploiting consumers and generating excessive profits.
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