Gov. Tim Walzsaysa Harris administration would have no place in Americans’ bedrooms. But judgingbywhat we know from the Harristaxplan, it would have a biggerplace than ever in our wallets and bank accounts.
Harris is proposinga $5 trilliontaxincrease, the biggest in American history. If passed, it would fundamentally reshape the American economy and the scale in which the government extracts funds from citizens. Herplansinclude:
Raising the corporatetaxrate from 21% to 28%:This 33%taxhike would make American businesses less competitive globally. Combined with state levies, it would make American corporations among the highesttaxed in the developed world. The country would return to the bad old days of corporate inversions, where businesses flee offshore to reduce theirtaxcosts.
Vice President Kamala Harris speaks on her economic policy at the Hendrick Center For Automotive Excellence on Aug. 16, 2024 in Raleigh, North Carolina. (Grant Baldwin/Getty Images)
Economists and common sense say workers and customers pay for such corporatetaxhikes because companies are forcedto lower wages and increase prices to fund them. More than one millionAmerican small businesses file as corporations, so thistaxhike wouldn’tonly hit massive corporations like Google and Apple as the Harris campaign implies.
KAMALA HARRIS AND HER TWO SOCIALIST PROPOSALS TO CRUSH THE US ECONOMY
Raising the capital gainstaxrate to match the personal rate: This move would nearly double the capital gainstaxrate, creating a huge disincentive to invest in America. Access to credit would further decline, and equity prices that ordinary Americans dependonfor their retirement would plummet.
Harris overlooks the good reasons investment income istaxedat a lower rate. Forone, it is not indexedto inflation, so investors already face a significant inflationtaxontheir appreciation. For another, investment income is alreadytaxedat the corporate level, so it deserves to betaxed less when distributed to minimize doubletaxation.
VideoEnding the step-up in basis for estates:Harris wants to end thetax-free transferring of most estates and treat death as ataxable event for capital gains purposes. Thisis a massive attackonbaby boomers planning their wills and dramatically reduces what they will be able to pass down to their heirs.
This plan would prevent many small businesses and family farms from passing down their properties. Consider a business or farm that has appreciated from $100,000 to $1 million over the last generation. Many heirs could not afford the associated tax hit of several hundred thousand dollars and would have no choice but to sell to generate the liquidity needed to pay.
Harris’plan attacks a primary aspiration of many small business owners: the opportunity to create generational wealth.
VideoTaxing unrealized capital gains (aka a wealthtax):Harris wants to fundamentally change howtaxesare calculatedbytaxing paper gains in property and investments before they are realized. Such a move wouldtaxexpected profits that may not actuallymaterialize if the market falls. Think of the massive penalty to investors in companies like Pelaton (stock price down 98%) or WeWork (delistedafter bankruptcy) thatwould betaxedonphantom gains that never materialize.
Small business owners who work for decades to increase the value of their business would be hitwith majortaxbills year after year as punishment for this appreciation. Ordinary Americans would see their retirement accounts decline as investors pull out of public markets.
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Allowing theTaxCuts and Jobs Act to expire:Harrisopposes theTaxCuts and Jobs Act of 2017andplansto let it expire as scheduled at the end of next year. Thiswould create a massivetaxincrease for Main Street, which would have to say goodbye to a 20% small businesstaxdeduction, immediate expensing of capital, and lowertaxrates.
VideoThe TCJA led to historic shared economic prosperity in 2018 and 2019, and it has allowedmany small businesses to weather the Biden-Harris storm. Thetaxhike that would accompanyits elimination would be the final straw for many small businesses.
These are just some of thetaxhikes a Harris administration would seek. Harris alsowants to increase the top marginal personal rate to 44.6% and quintuple the stock buybacktax.
Harris’taxplansare a giant leap toward socialism, especially when you consider how they’d be expanded to more and moretaxpayersonce implemented.
It’s up to political independents, who may disagree with Republicansonsome issues, to vote conservative this election to prevent thistaxArmageddon from occurring.
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Alfredo Ortiz is president and CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of “The Main Street Matters” podcast.
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