Harris proposes a 28% tax on capital gains for the wealthy, as opposed to Biden's plan of 39.6%.

Vice President Kamala Harris put forward a plan to impose a 28% tax on long-term capital gains for households with an annual income exceeding $1 million. This proposal deviates from the 39.6% rate outlined by President Joe Biden in his fiscal year 2025 budget. Harris made this announcement during a rally in North Hampton, New Hampshire, stating, "We will tax capital gains at a rate that rewards investment in America's innovators, founders, and small businesses."

Details of the Capital Gains Tax Proposal

As of now, long-term capital gains, which refer to assets held for over a year, are taxed at a maximum rate of 20%. The Vice President's recommendation for a 28% tax on long-term capital gains signifies a significant departure from the current system, particularly targeting high-income households.

The proposal, if implemented, would mean that wealthy households with an annual income of $1 million or more would be subject to the new tax rate on their long-term capital gains. This move reflects a broader effort to address income inequality and generate additional revenue from the wealthiest segments of society.

Departure from Biden's Economic Platform

Vice President Harris' capital gains tax plan introduces a notable divergence from President Biden's economic platform. Despite previously aligning her economic proposals with those of the President, Harris' announcement represents a departure from the 39.6% rate outlined in Biden's budget.

Within the Democratic Party, some members have voiced opposition to certain components of the aggressive economic rhetoric aimed at large corporations and the proposed tax increases. Representative Ro Khanna's criticism of the blanket tax on unrealized gains, which Biden supports, highlights the internal debate over the feasibility and potential consequences of such measures.

Harris' Economic Strategy and Vision

Over recent weeks, Harris has endeavored to present herself as both a pro-business candidate and a champion of the middle class, keen on tackling corporate greed. Harris' economic pitch is strategically designed to resonate with both business interests and the Democratic base concerned with income disparity.