(NewsNation) — Vice President Kamala Harris is proposing increasing the corporate tax rate to 28% as part of her economic plan, which focuses on creating more opportunities for middle-class Americans should she be elected president.
Harris’ campaign announced the proposed hike from the current rate of 21% on Monday night, three days before she accepts the Democratic nomination for president on Thursday night at the Democratic National Convention in Chicago.
By comparison, former President Donald Trump said he would lower the corporate tax rate to 15% if elected in November.
“As President, Kamala Harris will focus on creating an opportunity economy for the middle class that advances their economic security, stability, and dignity,” Harris’ campaign spokesman James Singer said in a released statement.
The non-partisan Committee for a Responsible Federal Budget estimates an increase to 28% would reduce the federal budget by around $1 trillion over the next 10 years.
Kamala Harris’ hike rate reasoning
Monday’s announcement comes just days after Harris unveiled a four-part economic plan that would provide tax relief to working-class and middle-class Americans. President Joe Biden has said that he supports increasing the corporate tax rate, although Biden pushed for the rate to jump to 35% when he won the election to the White House in 2020.
Trump reduced the tax rate from 35% to its current rate in 2017 as part of his Tax Cuts and Jobs Act.
Harris’ economic plan, pitched by the vice president as the “opportunity economy” includes making the cost of housing, groceries, healthcare, and childcare more affordable. Her plan also called for eliminating price gauging in food prices and building more affordable housing.
The jump of 7% in the current tax rate, which Trump cut to 21% during his presidency, would help pay for Harris’ proposed economic plan.
“Unlike Donald Trump, whose extreme Project 2025 agenda would drive up the deficit, increase taxes on the middle class by $3,900, and send our economy spiraling into recession — (Harris’) plan 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,” Singer said in the statement issued Monday night.
Project 2025’s corporate tax take
Trump’s rollback of the corporate tax rate from 35% to 21% was said to be permanent when the former president lowered the rate as part of his signature legislation in 2017.
Yet, in Project 2025, a nearly 1,000-page document released by the conservative think tank the Heritage Foundation and other right-leaning organizations, the corporate sales tax would drop by 3% from its current rate.
In addition to reducing the corporate gains tax to 15%, the corporate tax rate would be reduced to 18%. The plan also calls for the formation of just two income tax rates of 15% and 30% and for eliminating most deductions, credits, and exclusions.
Project 2025 would cut the number of income taxes from seven to two and would create a flat tax rate for Americans who earn up to $168,000 per year while the higher tax rate would be reserved for those who make more.
What Donald Trump’s tax plan calls for
Trump has criticized Harris’ plans for the economy, claiming at a recent news conference that the vice president would destroy the economy if elected in November.
Meanwhile, Trump has said that if he wins a second term in the White House, he will eliminate taxes on social security benefits for seniors. In addition, Trump’s proposed cut of the corporate tax rate goes beyond what Project 2025 calls for.
Trump has proposed slashing the corporate tax rate back to 15% if elected. Trump would also seek to extend the tax cuts that were introduced under the TCJA and that are set to expire in 2025 unless Congress acts on the legislation.
Should the tax cuts not be extended, experts believe that 60% of American taxpayers could see a jump in what they pay, CNBC reported. Harris said last week that if Trump was re-elected and his tax plan was enacted, the average American family could pay $3,900 more per year.
Trump has proposed a 10% tariff for all imported products and a 60% tariff for Chinese imports that the former president said could generate enough money that would allow for federal taxes to be eliminated.