Harris to break with Biden on capital gains tax, proposing a smaller increase

In an economic speech in New Hampshire on Wednesday, Vice President Kamala Harris plans to propose a smaller increase in taxes on capital gains, breaking with the policy laid out by President Joe Biden in his 2025 budget, according to people familiar with the matter.

Vice President Kamala Harris plans to propose a smaller increase in taxes on capital gains during an economic speech in New Hampshire on Wednesday, breaking with the policy laid out by President Joe Biden in his 2025 budget, according to people familiar with the matter. The current capital gains tax rate – 23.8% for higher earners – is paid when an investment is sold, or gains are realized. The Biden budget proposes raising that rate to the top rate he wants to levy on ordinary income – 39.6% – for households with taxable income over $1 million. Harris, the people familiar with the matter say, believes 39.6% is too high and is expected to outline her proposal on Wednesday. While Harris still supports taxing the wealthiest individuals and corporations at higher rates – as Biden’s budget also calls for – she believes that a lower capital gains rate would incentivize investors to put more money into startups and small businesses. Advisers said Harris supports allowing many Trump-era tax cuts for the wealthy and big corporations to lapse in favor of funding more targeted programs for families and small businesses. Biden’s budget proposal also contains other tax increases on the wealthy, including raising the top marginal income tax rate to 39.6%, up from the 37% rate established by the 2017 Trump tax cuts law, and levying a 25% minimum income tax on households with more than $100 million in net worth. The move comes as Harris attempts to establish herself as more moderate in some areas of economic policy while still embracing some elements of a more populist platform, like a $25,000 credit for first-time homebuyers, a $6,000 child tax credit for newborns and federal investigations into retail grocery pricing. During a truncated sprint toward Election Day, Harris has embraced the policies of the Biden administration, which ushered trillions of government spending into the American economy, which also grappled with inflation at its highest in decades.