Harris Proposes a 28% Capital Gain Tax Rate and Small Business Tax Relief

Last week Vice President Kamala Harris called for a 28% capital gain tax rate on those earning more than $1 million.

Additionally, she proposed increasing the threshold for deducting business start-up costs from $5,000 to $50,000.

She announced these proposals at an event Harris held in New Hampshire on September 4th.

Harris’s 28% Long-Term Capital Gain Tax Rate

Currently, the highest long-term capital gain rate is 20%; however, the net investment income tax (NIIT) of 3.8% also applies for those with income in excess of $200,000 ($250,000 if married).

Previously, the Harris campaign showed support for the tax policies in President Joe Biden’s Greenbook which called for a capital gain rate of 39.6% (ordinary tax rates) for high-income earners plus an increase to the NIIT from 3.8% to 5%.

But at the New Hampshire event, Harris proposed the long-term capital gain rate should be capped at 28% for those earning more than $1 million.

Small Business Tax Changes

Harris also proposed a change to the threshold small businesses can deduct for start-up costs.

Currently, businesses can deduct $5,000 of start-up costs and must amortize any costs over that threshold for 15 years.

Harris proposed increasing the small business start-up cost threshold to $50,000.

She hopes this will increase the number of new small business applications to 25 million in her first term (compared to Biden’s 19 million).

Harris also proposed a standard deduction for business owners and promised to reduce barriers to obtaining licenses required to start small businesses.

This proposal comes on the heels of a recent Harris campaign announcement that Harris wants to raise the corporate tax rate from 21% to 28%. Previously, Harris proposed raising the corporate rate to 35%.

Summary

In recent weeks, Harris has proposed many of her own tax and economic policies seeking to build confidence in voters that she has a handle on the economy and will cool the housing market.

You can stay updated on Harris’s and Trump’s tax proposals with our candidate tracker which we update on an ongoing basis.