21/08/24

US: Kamala Harris Proposes Corporate Tax Hike Aiming For Fairness

As published on: evrimagaci.org, Wednesday 21 August, 2024. 

The Vice President seeks to increase the corporate tax rate to support economic equity and reduce the deficit.

Recently, Vice President Kamala Harris unveiled her proposal to raise the U.S. corporate tax rate from 21% to 28%. This plan aims to support her economic strategy should she win the presidency.

The announcement, made on August 19, 2024, is seen as part of Harris's broader agenda to address economic inequality and boost funding for social programs. A spokesperson for her campaign indicated this move would encourage billionaires and large corporations to pay their fair share.

This proposed tax increase signals a significant shift from 2017's Tax Cuts and Jobs Act, which reduced the rate from 35%. President Donald Trump, who enacted these cuts, has vowed to make them permanent if re-elected, possibly lowering rates even more.

The nonpartisan Committee for a Responsible Federal Budget suggests Harris's increase could help reduce the federal deficit by around $1 trillion over the next decade. Each percentage point lift in the corporate tax rate is estimated to generate about $100 billion over this period.

While some economists support the proposal, citing its potential to fund important social initiatives, critics warn it may drive businesses to relocate offshore for lower taxes. This could potentially lead to job losses within the U.S., as companies may choose to invest elsewhere to avoid the burden of higher taxes.

During her campaign speech, Harris also emphasized her commitment to keeping taxes stable for individuals earning under $400,000 per year. This aspect has continued to resonate with many Americans feeling the pressure of rising living costs.

Market analysts and political opponents express concern about potential economic repercussions. Some fear the tax hike might stifle job creation and hurt the economy, especially during current high inflation conditions.

Harris has also proposed additional economic reforms, including increased housing subsidies, child tax credits, and measures to curb price gouging, particularly for necessities like groceries. Alternatively, her critics argue this could shift the focus from more pressing issues faced by average Americans.

Analysts point out the difficulty Harris may face obtaining congressional approval for her plan, as Republicans are expected to fiercely oppose these tax hikes. With the upcoming election closely contested, this proposal could become one of the central issues for debate.

Economist Art Laffer, known for his supply-side economic theories, highlighted concerns about the impact on disadvantaged groups. He argues the proposed tax increase could disproportionately affect minorities and lower-income individuals, who are often employed by the very businesses likely to be impacted.

Charles Payne, a Fox Business host, chimed in to warn of the jobs at stake. He stated, “This is something...that hurts our businesses and hurts our workers,” reflecting sentiments shared by numerous industry leaders.

The increased focus on corporate taxation aligns with heightened scrutiny of inflation and its effects on everyday Americans. The Consumer Price Index had reached alarming levels, with prices increasing by over 20% since Harris and President Biden assumed office.

Harris’s supporters believe the tax hike could build the necessary revenue to support her ambitions, including infrastructure improvements and healthcare reform. Nonetheless, they will need broad public backing to counter opposition from large corporations wary of increasing costs.

With her suggestion now public, both Harris and her administration must navigate the tricky waters of public opinion and political opposition. Implementing significant tax reforms could be pivotal for her campaigning success and future policy agenda.

Harris's critics included prominent media figures who argue contrasting economic visions for America. They suggest the public may not appreciate policies perceived as favorable to larger corporations over small businesses.

Beyond fiscal policy, Harris's proposals hint at broader economic philosophies around fairness and equitable tax responsibilities. Her campaign suggests viewing corporate tax increases not just as revenue generation, but as moral imperatives.

While her proposal signals potential shifts for many Americans, achieving these tax reforms will likely require negotiation and compromise. Stakeholders from all sides will be watching closely, and reactions will shape the coming months leading up to the election.

The political dynamics surrounding corporation taxation represent long-standing tensions between Democrat and Republican economic philosophies. How this will play out remains uncertain but will undoubtedly evoke strong reactions from both sides.

This push for raising corporate taxes occurs within the backdrop of increasing awareness of wealth inequality within the U.S. Harris's proposal has emerged as both a symbol of her administration’s goals and as fodder for fierce political debate.

Tags

Kamala Harris US Corporate Tax Tax fairness US Tax