Many provisions in the 2017 tax law are slated to expire after 2025. Donald Trump wants the 2017 law made permanent.
Kamala Harris is sticking with this pledge:
No tax hikes if you make less than $400,000. We take this to mean that she would give her support to extending the tax breaks in the 2017 law to people earning less than $400,000, which are most taxpayers. But..and here is the big but...she wants to raise taxes on the people that make the products and create the jobs. And that extra cost is always passed along to guess who: the people earning less than $400,000 in the form of inflation.
Of course, who controls congress will determine if she get what she wants, but let’s take a look at other tax ideas Harris supports in her effort to buy votes from people who have no idea how the economy really works.
Some are new, others are the same old talking points.
High-income individuals would pay more in taxes.
She wants to bring back the top 39.6% income tax rate for people making $400,000 or more and hike the 3.8% net investment income surtax to 5% for these taxpayers.
The wealthy would pay more capital gains tax. Long-term capital gains tax would be imposed at ordinary tax rates up to 39.6% (44.6% with 5% NII tax added in) for taxpayers with taxable incomes over $1 million…$500,000 for separate filers.
Like Biden, she may want to tax unrealized gains upon death. This proposal would treat death as a realization event for income tax purposes… a deemed taxable sale at fair market value, with capital gains and losses reported on the decedent’s final income tax return…with a $5 million lifetime gain exclusion.
She might also back a 25% minimum income tax on the ultrarich… people with at least $100 million in wealth. The tax would apply to taxable income plus unrealized capital gains, meaning the gain on appreciated assets not yet sold or disposed of. If this provision is ever adopted, expect opponents to quickly sue. Some Supreme Court justices don’t look favorably on taxing unrealized gains. (This means taxing money you have not even made yet.)
Editor's Note: Anyone who studies history knows that every time the government hikes up taxes like this, the economy does worse. Every time there were huge tax cuts, whether it was under JFK or Trump the economy soared. But then economic history is no longer taught in school, which is why they get away with this type of hype.
Families, first-time home buyers and tipped workers.
She wants to bring back the 2021 expansions to the child credit…hiking the amount from $2,000 per child to $3,600, with monthly payments and full refundability.
And she wants to make it even bigger, by giving taxpayers a one-time child credit of $6,000, to be claimed on the parent’s tax return for the first year of the child’s life.
Other proposals are: Give first-time home buyers a credit of up to $10,000. Extend the expansions to Obamacare subsidies, allowing more people to get credits for buying health insurance through the marketplace. Plus make tipped income tax-free.
Editor's Note: Our federal government is bankrupt. Giving away more money that we don't have (to try and get people to vote for you) which would create more inflation makes absolutely no sense. In the end it would harm the very people that they claim they are trying to help. But it sounds good. Gimme, Gimme, Free, Free..
On business taxes.
Harris wants to raise the 21% corporate tax rate to 28%. She would increase the 15% alternative minimum tax on very big corporations to 21%. She’d do away with what she and many Democratic lawmakers see as tax loopholes, while keeping the green-energy tax subsidies enacted in the Inflation Reduction Act.
She’d also like to quadruple the 1% excise tax on stock buybacks by publicly held firms.
Editor's Note: I personally think that the green-energy tax subsidies are the biggest tax loopholes in the entire budget, but that's a subject for another time. Prior to 2017, we had some of the highest corporate tax rates of any country in the entire world. That's why all the multi-national companies were moving their headquarters overseas. The money was all flowing out of the country and creating jobs elsewhere. When the tax rates were lowered to 21% making the US one of the lowest corporate tax rates, the money started staying the flowing back into the US creating new manufacturing facilities and good jobs. Why would anyone in their right mind want to raise the rates and stop investments into this country? But then politics is mostly about perceptions and has little to do with reality.