Vice President Kamala Harris is gunning for businesses with a plan to hike taxes.
Harris campaign spokesman James Singer confirmed the plan to NBC News, claiming—without evidence— that the tax increase is “a fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share.”
The hike could significantly weigh on economic growth and discourage investment inside the U.S. By raising the statutory rate higher than those of many other major economies, the tax could drive businesses abroad.
“At a 28 percent federal rate, the U.S. corporate rate would be roughly 32 percent and the second highest in the OECD,” AEI senior fellow Kyle Pomerleau noted.
This chart I made in 2021 remains relevant.
At a 28% federal rate, the U.S. corporate rate would be roughly 32 percent and the second highest in the OECD.https://t.co/JxpBGuZ18J pic.twitter.com/30xcMIZuKL
— Kyle Pomerleau (@kpomerleau) August 19, 2024
Harris’s tax plan is part of her attempt to shore up her presidential platform ahead of the Democratic convention, but it’s a risky gamble. Until now, she’s been vague about how she’ll fund her expensive proposals, like subsidizing home purchases for first time buyers and transferring personal medical debt to tax-payers.
This isn’t even the first time Harris has floated a tax hike. Back in her failed 2020 presidential bid, she wanted to fully repeal Trump’s tax cuts and crank the corporate rate back up to 35 percent. Now, she’s settling for 28 percent, more in line with President Joe Biden’s budget. But even at 28 percent, businesses would take a significant hit.
Republicans are expected to fight this tooth and nail. Harris might need Democrats to hold onto Congress if she has any hope of pushing this through. However, with Trump’s tax cuts set to expire at the end of 2025, a fierce battle is brewing in Congress over which parts to extend.
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