What's Kamala Harris' Tax Plan for Middle Income Workers?

By David Lightman
McClatchy Washington Bureau
(TNS)

Kamala Harris has long urged lower federal income taxes for lower and middle class taxpayers, while supporting higher taxes for corporations and wealthier people—positions she’s reiterated since becoming the Democratic Party’s presidential nominee, without further details.

But those details will likely become a crucial campaign issue, as polls consistently show economics is one of voters’ top concerns.

Harris has continued to talk in broad terms about her tax ideas, notably a pledge not to raise taxes on anyone earning less than $400,000.

Republicans and conservative groups maintain her record and past statements suggest she’ll raise taxes on people making less than that and have been hammering her with her past statements and policies.

Harris’ campaign did not respond to a request for comment.

Repeal the Trump tax cuts?

Americans for Tax Reform, a conservative tax group, keeps reminding supporters that Harris in the past has pledged to repeal the Trump era tax cuts “on day one” if she wins the White House.

The 2017 Trump-backed package, the most sweeping change in tax law in 31 years, lowered most income tax rates for individuals and corporations and significantly raised the standard deduction.

Harris made the repeal statements in 2019 and 2020. There is no evidence she has retracted these statements.

“You can see from the bills she has sponsored and her own written and spoken word that she has no problem raising taxes on people making less than $400,000 a year,” Americans for Tax Reform said in response to questions from The Bee.

Harris has reiterated recently she would not take that step. In April, she said on Facebook, “Let’s be clear: If you make under $400,000 a year, you won’t pay a penny more in taxes under our administration.” In late July, she repeated she would not raise taxes on those earning less than $400,000 a year if elected president.

End child tax credits?

Speaking on Fox News last month, Republican vice presidential nominee JD Vance asked: “How did we get to this place where Kamala Harris is calling for an end to the child tax credit?”

That’s not true. Harris has been a vocal supporter of the child tax credit for years and reiterated that support last month.

“We believe in a future where no child has to grow up in poverty, which is why I helped pass the child tax credit,” she said.

She supported the temporary increase in the credit in 2021, a COVID-era effort to help families with children. This year, she joined President Joe Biden in trying to restore the larger credit.

No middle class tax breaks?

“Harris is ‘pledging not to raise taxes’ on low- and middle-class Americans—an assertion completely detached from reality and without any critical examination,” the Republican National Committee’s rapid response team said July 26.

The Republicans cited efforts by the Biden administration to raise taxes. The 2022 Inflation Reduction Act did raise taxes on big corporations and some investors, and provided more money for tax law enforcement. But it also took steps to lower the cost of prescription drugs and provide breaks for clean energy.

The GOP refers to an analysis by the bipartisan Joint Committee on Taxation showing slight increases in tax liability for most income levels.

The nonpartisan Tax Policy Center said the act “would modestly reduce or not change tax burdens at nearly all income levels” in the three years it analyzed.

One exception was taxpayers in the top 1% of incomes, who in 2027 would pay more.

But, the analysis added, looking at the act more broadly, “families with incomes below $400,000 would bear some of the burden of corporate tax hikes through lower wages or lower returns to stock ownership, particularly in retirement accounts, even if they don’t pay more in direct taxes.”

Harris’ philosophy on taxes has remained consistent throughout her years in the Senate, from 2017 to 2021, and as vice president.

“Building up the middle class will be a defining goal of my presidency,” Harris said at a rally in Wisconsin, last month. Her campaign did not respond to requests for more information.

Cuts only for lower income earners?

When Harris was a U.S. senator, one of her biggest initiatives was to cut taxes for lower and middle income people, though not as extensively as Biden has proposed.

Harris in 2019 authored the Livable Incomes for Families Today Act, or LIFT. It would provide tax credits of up to $3,000 a year for single filers and $6,000 for joint filers. The credit would phase out as incomes got higher.

Single filers earning more than $50,000 and joint filers earning more than $100,000 would not be eligible.

The plan went nowhere in Congress. Trump was president and had signed a sweeping tax cut bill in December 2017, and the cost of Harris’ plan was also questioned by many economists and members of Congress. Harris opposed the Trump tax bill.

The Harris proposal was estimated to cost $3 trillion over 10 years. Harris proposed several ways of raising revenue, including raising the corporate income tax rate to 35%. The Trump tax cut set the rate at 21%, and Biden proposed raising it to 28%.

While the individual tax breaks would help those who received them, Garrett Watson, an economist at the Tax Foundation, said the tax changes would shrink the economy slightly.

He said that while many taxpayers would pay tax at a lower rate, “It would be more than offset by the higher marginal tax rates faced by taxpayers” who don’t get the break.

Marc Goldwein, senior vice president at the nonpartisan Committee for a Responsible Federal Budget, estimated that 85% of the cost of the Harris plan would come from higher individual rates, affecting people earning more than $100,000 a year, as well as keeping a cap on how much someone could deduct for state and local taxes.

“I wouldn’t assume because she proposed something in 2019 that she still supports it or that it’s high on her agenda,” he said. “We just don’t know yet.”

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