1 Reading and 4 Cases
Topline preliminary estimates.
Tax Foundation General Equilibrium Model, September 2024.
With less than two months left in the 2024 presidential campaign, Vice President Kamala Harris has sketched out sufficient details of her fiscal and economic agenda for us to provide a preliminary analysis of the budgetary, economic, and distributional effects. On tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. policy, Harris carries forward much of President Biden’s FY 2025 budget, including higher taxes aimed at businesses and high earners. She would also further expand the child tax credit A tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. (CTC) and various other tax credits and incentives while exempting tips from income tax.
On a gross basis, we estimate that Vice President Harris’s proposals would increase taxes by about $4.1 trillion from 2025 to 2034. After taking various credits and tax cuts into account, Harris would raise about $1.7 trillion over 10 years on a conventional basis, and after factoring in reduced revenue from slower economic growth, the net revenue increase comes to $642 billion. We estimate the proposed tax changes would reduce long-run GDP by 2.0 percent, the capital stock by 3.0 percent, wages by 1.2 percent, and employment by about 786,000 full-time equivalent jobs.
We find the tax policies would raise top tax rates on corporate and individual income to among the highest in the developed world, slowing economic growth and reducing competitiveness. The tax credits and other carveouts would complicate the tax code, run more spending through the IRS, and, together with various price controls, fail to improve affordability challenges in housing and other sectors.
Many tax policies remain unspecified, including how Harris might deal with next year’s expiration of the Tax Cuts and Jobs Act (TCJA). Harris has not clearly indicated if or how her spending priorities align with the FY 2025 budget proposals. Depending on where she lands on these issues, the deficit impacts could be large.
In a possible scenario in which she extends the TCJA for all those earning under $400,000 and adopts all the spending proposals specified in the FY 2025 budget, we estimate the net effect of her policies would increase deficits by $1.5 trillion over the next decade, measured on a conventional basis. Including the economic impacts of the tax increases, the net effect could increase deficits by roughly $2.6 trillion over the next decade.
The wide range of possibilities reflects considerable uncertainty about her fiscal policy stance at this point, leaving a large void regarding how she might deal with the already unprecedented , dangerous, and unsustainable federal debt trajectory.
Gross Domestic Product (GDP) | -2.0% |
Gross National Product (GNP) | -1.8% |
Capital Stock | -3.0% |
Wage Rate | -1.2% |
Full-Time Equivalent Jobs | -786,000 |
Harris’s tax plan relies on higher taxes on businesses and high earners to raise new revenues as outlined in President Biden’s FY 2025 budget with some revisions (to capital gains taxes, as noted), combined with several tax credits. All provisions are modeled as starting in calendar year 2025 unless otherwise noted.
We also modeled various miscellaneous provisions for corporations, pass-through businesses, and individuals, including several energy-related tax hikes largely pertaining to fossil fuel production. While the Biden budget improperly characterized fossil fuel provisions as subsidies, many are deductions for costs (or approximations of costs) incurred.
We estimate the tax changes in Harris’s tax proposals would reduce long-run GDP by 2.0 percent, the capital stock by 3.0 percent, wages by 1.2 percent, and employment by about 786,000 full-time equivalent jobs. Harris’s tax proposals would decrease American incomes (as measured by gross national product, or GNP) by 1.8 percent in the long run, reflecting offsetting effects of increased taxes and reduced deficits, as debt reduction reduces interest payments to foreign owners of the national debt.
Raising the corporate income tax rate to 28 percent is the largest driver of the negative effects, reducing long-run GDP by 0.6 percent, the capital stock by 1.1 percent, wages by 0.5 percent, and full-time equivalent jobs by 125,000.
Our economic estimates likely understate the effects of the Harris tax plan since they exclude two novel and highly uncertain yet large tax increases on high earners and multinational corporations, namely a new minimum tax on unrealized capital gains and a UTPR consistent with the OECD/G20 global minimum tax model rules. Nor do we include the proposed unspecified R&D incentives that would replace the lower tax rate on foreign-derived intangible income FDII.
Provision | Change in GDP | Change in GNP | Change in Capital Stock | Change in Wages | Change in Full-time Equivalent Jobs |
---|---|---|---|---|---|
Raise the top tax rate on individual income to 39.6% for those earning $400,000 single or $450,000 joint | -0.1% | -0.1% | -0.1% | 0% | -86,000 |
Tax unrealized capital gains at death over $5 million and tax capital gains over $1 million at 28% | -0.2% | -0.4% | -0.3% | -0.1% | -75,000 |
Limit 1031 like-kind exchanges to $500,000 in gain | Less than –0.05% | Less than –0.05% | Less than –0.05% | Less than –0.05% | -2,000 |
Expand the net investment income tax base to active pass-through business income | -0.2% | -0.2% | -0.3% | -0.2% | -41,000 |
Raise the net investment income tax rate from 3.8% to 5% and raise the additional Medicare tax from 0.9% to 2.1% | -0.5% | -0.2% | -0.3% | -0.1% | -177,000 |
Tax carried interest as ordinary income | Less than –0.05% | Less than –0.05% | Less than –0.05% | Less than –0.05% | -4,000 |
Impose new limits on large retirement account balances and increase minimum required distributions and misc. taxes on saving | Less than –0.05% | -0.1% | Less than –0.05% | Less than –0.05% | -7,000 |
Tighten estate tax rules | Less than –0.05% | Less than –0.05% | Less than –0.05% | Less than –0.05% | -3,000 |
Exempt tips from federal income tax | Less than +0.05% | Less than +0.05% | Less than +0.05% | Less than +0.05% | 21,000 |
Raise the corporate tax rate from 21% to 28% | -0.6% | -0.6% | -1.1% | -0.5% | -125,000 |
Increase the corporate book minimum tax rate from 15% to 21% | -0.1% | -0.1% | -0.2% | -0.1% | -12,000 |
Raise the stock buyback excise tax from 1% to 4% | Less than -0.05% | Less than -0.05% | -0.1% | -0.1% | -11,000 |
Changes to the international tax system | -0.1% | -0.1% | -0.2% | -0.1% | -19,000 |
Limit executive compensation deductibility under Section 162(m) | -0.1% | -0.1% | -0.1% | 0% | -106,000 |
Misc. corporate tax increases | Less than –0.05% | Less than –0.05% | Less than –0.05% | Less than –0.05% | -5,000 |
Make permanent the pass-through loss limitation and misc. pass-through tax increases | Less than –0.05% | Less than –0.05% | -0.1% | Less than –0.05% | -2,000 |
Make the American Rescue Plan Act EITC expansion permanent, revive and make permanent the ARPA CTC and increase newborn CTC to $6,000 | -0.1% | -0.1% | -0.1% | 0% | -131,000 |
Impact of spending and budget deficit | 0% | 0.2% | 0% | 0% | 0 |
Total Economic Effect | -2.0% | -1.8% | -3.0% | -1.2% | -786,000 |
Across the major provisions modeled by Tax Foundation, we estimate that Harris’s tax plan would raise $2.2 trillion of tax revenue from corporations and $1.2 trillion from individuals from 2025 through 2034.
For tax proposals from the Biden FY 2025 budget, we relied on estimates from the White House Office of Management and Budget (OMB) for provisions we did not model, including the billionaire minimum tax, UTPR, various international tax changes for oil and gas companies, smaller international tax changes, improvements to tax compliance and administration, and unspecified R&D incentives to replace FDII.
In total, accounting for all provisions, we estimate the budget would raise just over $4.1 trillion in gross revenue from tax changes over the 10-year budget window.
Tax cuts, like the tax exemption A tax exemption excludes certain income, revenue, or even taxpayers from tax altogether. For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the Internal Revenue Service ( IRS ), preventing them from having to pay income tax. for tip income, the expanded deduction for startup expenses, and the unspecified incentive to replace FDII, reduce gross revenue by $235 billion, while expanded tax credits reduce the revenue by another $2.2 trillion. This results in a net tax increase of about $1.7 trillion over 10 years on a conventional basis.
On a dynamic basis, factoring in reduced tax revenues resulting from the smaller economy, we estimate Harris’s tax plan would raise about $642 billion over 10 years.
The economic harm from Harris’s tax hikes would also greatly reduce the ability to address an emerging debt crisis. Under current law, the debt-to-GDP ratio will hit 201 percent in 40 years, while the Harris tax plan on a conventional basis would reduce the debt-to-GDP ratio to 189 percent. However, after factoring in reduced tax collections and a smaller economy, the debt-to-GDP ratio would decline only slightly, to 200 percent.
Individual Revenue Raisers | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2025-2034 |
---|---|---|---|---|---|---|---|---|---|---|---|
Raise top tax rate on individual income to 39.6% | $49.6 | $10.9 | $11.9 | $12.3 | $12.8 | $13.3 | $13.7 | $14.2 | $15.5 | $16.2 | $170.5 |
Tax unrealized capital gains at death over $5 million and impose a 28% tax rate on capital gains over $1 million | -$12.3 | -$0.9 | $7.9 | $18.8 | $22.0 | $23.9 | $25.1 | $25.7 | $29.9 | $31.5 | $171.8 |
Expand the net investment income tax base to active pass-through income | $23.0 | $22.8 | $24.4 | $24.7 | $25.2 | $25.8 | $26.2 | $25.9 | $29.5 | $30.3 | $257.7 |
Raise the net investment income tax rate from 3.8% to 5% | $9.5 | $10.1 | $11.3 | $12.4 | $12.8 | $13.0 | $13.2 | $12.9 | $14.9 | $15.3 | $125.3 |
Raise the additional Medicare tax from 0.9% to 2.1% | $20.3 | $20.5 | $22.6 | $23.6 | $24.9 | $26.3 | $27.7 | $28.9 | $30.7 | $32.6 | $258.2 |
Make permanent the limit on excess business losses for pass-through firms | $0.0 | $0.0 | $0.0 | $0.0 | $4.0 | $4.6 | $3.8 | $3.2 | $2.6 | $2.7 | $20.9 |
Limit 1031 like-kind exchanges to $500K in gain | $1.1 | $1.9 | $1.9 | $2.0 | $2.1 | $2.1 | $2.2 | $2.2 | $2.3 | $2.4 | $20.3 |
Tax carried interest as ordinary income | $0.6 | $0.7 | $0.7 | $0.7 | $0.7 | $0.7 | $0.7 | $0.7 | $0.7 | $0.7 | $6.7 |
Create new limitations on high-income taxpayers with large retirement account balances and increasing minimum required distributions and miscellaneous tax increases on saving* | $10.3 | $9.1 | $7.0 | $5.9 | $5.4 | $5.2 | $5.1 | $4.8 | $5.6 | $5.7 | $63.9 |
Tighten estate and gift tax rules | $5.9 | $5.9 | $8.4 | $8.9 | $9.3 | $9.9 | $10.5 | $11.0 | $11.8 | $12.5 | $94.1 |
Miscellaneous tax increases on pass-through firms** | $4.3 | $5.3 | $3.9 | $2.3 | $1.0 | $0.6 | $0.8 | $0.9 | $1.1 | $1.3 | $21.5 |
$112.3 | $86.1 | $99.9 | $111.5 | $120.2 | $125.5 | $128.9 | $130.5 | $144.6 | $151.3 | $1,210.8 | |
Raise corporate tax rate to 28% | $94.4 | $81.2 | $82.2 | $79.1 | $82.7 | $84.2 | $87.5 | $84.9 | $75.8 | $130.9 | $882.8 |
Raise corporate alternative minimum tax from 15% to 21% | $25.8 | $37.0 | $41.9 | $48.0 | $32.0 | $32.1 | $36.0 | $49.3 | $58.8 | -$14.4 | $346.4 |
21% GILTI minimum tax rate and other GILTI changes | $37.5 | $24.8 | $23.6 | $24.7 | $26.0 | $26.6 | $25.7 | $26.6 | $31.5 | $31.4 | $278.3 |
Repeal FDII | $9.7 | $8.7 | $6.9 | $8.0 | $9.3 | $9.4 | $6.4 | $12.7 | $10.9 | $10.2 | $92.1 |
Section 265 changes and world interest limitation | $15.7 | $16.0 | $16.3 | $17.5 | $18.4 | $18.9 | $19.7 | $21.0 | $21.6 | $22.3 | $187.3 |
4% excise tax on stock buybacks | $7.8 | $6.1 | $5.2 | $7.2 | $9.2 | $7.9 | $8.1 | $9.5 | $9.9 | $8.1 | $79.0 |
Modification to 162(m) limit on deduction of excessive employee remuneration | $27.9 | $23.6 | $27.6 | $33.8 | $32.3 | $28.9 | $23.6 | $21.0 | $21.9 | $25.2 | $265.7 |
Miscellaneous corporate tax increases*** | $2.8 | $2.3 | $2.6 | $2.8 | $3.1 | $3.4 | $3.7 | $4.1 | $4.5 | $5.0 | $34.3 |
$221.6 | $199.5 | $206.3 | $221.1 | $212.8 | $211.2 | $210.7 | $229.0 | $235.0 | $218.7 | $2,166.0 | |
Impose a 25% minimum tax on unrealized gains for taxpayers with net wealth over $100 million | $12.6 | $51.8 | $57.1 | $59.7 | $60.3 | $59.8 | $57.8 | $52.3 | $51.0 | $54.4 | $516.9 |
Levy an undertaxed profits rule on large multinational firms | $19.5 | $21.8 | $21.7 | $22.1 | $22.1 | $22.2 | $22.3 | $22.6 | $25.1 | $25.6 | $225.0 |
Changes to tax compliance and administration | $3.7 | $3.3 | $2.9 | $2.1 | $1.9 | $2.0 | $2.0 | $2.1 | $2.2 | $2.3 | $24.5 |
$35.8 | $77.0 | $81.7 | $83.8 | $84.4 | $84.0 | $82.1 | $77.0 | $78.4 | $82.3 | $766.4 | |
Gross Revenue Total | $369.7 | $362.6 | $387.9 | $416.4 | $417.4 | $420.7 | $421.7 | $436.5 | $458.0 | $452.3 | $4,143.2 |
Exempt tip income from federal income tax | -$10.2 | -$10.6 | -$11.0 | -$11.5 | -$11.9 | -$11.7 | -$12.1 | -$12.5 | -$13.0 | -$13.5 | -$118.0 |
Expand Section 195 startup expense deduction from $5,000 to $50,000 | -$3.7 | -$3.0 | -$3.0 | -$2.7 | -$2.4 | -$2.2 | -$2.0 | -$1.9 | -$1.9 | -$1.8 | -$24.5 |
Replace FDII with an incentive for R&D**** | -$9.7 | -$8.7 | -$6.9 | -$8.0 | -$9.3 | -$9.4 | -$6.4 | -$12.7 | -$10.9 | -$10.2 | -$92.1 |
-$23.6 | -$22.3 | -$20.9 | -$22.2 | -$23.6 | -$23.2 | -$20.5 | -$27.1 | -$25.8 | -$25.5 | -$234.6 | |
Reinstate the expanded ARPA child tax credit permanently and provide a $6,000 CTC for newborns | -$115.5 | -$193.8 | -$187.0 | -$178.3 | -$170.7 | -$163.0 | -$155.6 | -$148.3 | -$141.8 | -$135.4 | |
Make permanent the expanded ARPA earned income tax credit***** | -$12.6 | -$15.4 | -$15.9 | -$16.1 | -$16.3 | -$16.6 | -$16.8 | -$17.1 | -$16.6 | -$16.6 | |
Make permanent the expanded ARPA premium tax credits | $0.0 | -$20.3 | -$22.2 | -$23.7 | -$25.1 | -$26.5 | -$27.4 | -$29.0 | -$31.0 | -$33.0 | |
Housing tax credits ($25,000 homebuyer credit, tax credits for homebuilding) and misc. tax credits****** | -$34.7 | -$31.7 | -$36.6 | -$40.6 | -$17.4 | -$9.9 | -$11.3 | -$12.6 | -$13.8 | -$15.0 | |
Total Tax Credits | -$162.8 | -$261.2 | -$261.6 | -$258.7 | -$229.5 | -$215.9 | -$211.0 | -$207.0 | -$203.1 | -$200.0 | -$2,210.9 |
$183.2 | $79.1 | $105.5 | $135.5 | $164.3 | $181.6 | $190.2 | $202.4 | $229.1 | $226.8 | ||
$134.7 | $21.3 | $28.6 | $39.1 | $60.3 | $68.0 | $65.6 | $60.1 | $63.9 | $100.1 | ||
$183.2 | $79.1 | $105.5 | $135.5 | $164.3 | $181.6 | $190.2 | $202.4 | $229.1 | $226.8 | ||
$134.7 | $21.3 | $28.6 | $39.1 | $60.3 | $68.0 | $65.6 | $60.1 | $63.9 | $100.1 |
Adding more uncertainty and potentially increasing deficits substantially, Harris may extend the TCJA for people making under $400,000, as the FY 2025 budget mentions but does not formally include in the budget accounting. Harris could accomplish TCJA extension in many ways, but all possibilities would likely have a high fiscal cost, given that about 98 percent of taxpayers earn less than $400,000.
For instance, the Committee for a Responsible Federal Budget has estimated the cost of TCJA permanence for people earning less than $400,000 could range from about $1.5 trillion to $2.5 trillion over 10 years.
Nor has Vice President Harris specifically outlined her proposed changes to federal spending. While we do not assume a specific spending plan as part of our formal score, Harris has proposed investing in affordable childcare and long-term care programs , among other unspecified spending proposals, which would reduce net revenue collection further.
To tally up the range of potential deficit impacts from Harris’s proposals, we include as a proxy for potential spending the net change in spending under the FY 2025 budget of $1.18 trillion covering childcare and early learning, health care, drug pricing, education, and housing; paid leave and home care; public health; and some additional savings from other reductions in discretionary spending (note that we only include the spending changes over the 10-year budget window).
Assuming $1.18 trillion of additional spending and a $2 trillion revenue loss for TCJA extension, Harris’s combined fiscal policies could add as much as $1.5 trillion to deficits over the next decade on a conventional basis.
Under this scenario, and after accounting for the economic effects of the tax increases, we estimate deficits could increase by roughly $2.6 trillion over the next decade on a dynamic basis.
Alternatively, Harris could specify additional tax increases to offset the cost of TCJA extension, which would have additional negative impacts on the economy, or Harris could simply allow the TCJA to expire. Harris could also abandon part or all of the FY 2025 spending proposals.
Vice President Harris’s tax plan would raise marginal income tax rates faced by higher earners and corporations while expanding tax credits for lower-income households, resulting in substantially increased redistribution of income through the tax code. Our modeling of the distributional effects on after-tax income After-tax income is the net amount of income available to invest, save, or consume after federal, state, and withholding taxes have been applied—your disposable income. Companies and, to a lesser extent, individuals, make economic decisions in light of how they can best maximize their earnings. only includes specified tax proposals and does not include the impact of drug pricing provisions, the 25 percent billionaire minimum tax, the undertaxed profits rule, miscellaneous tax credits, IRS enforcement, or spending program changes.
The Harris tax plan would redistribute income from high earners to low earners. The bottom 60 percent of earners would see increases in after-tax income in 2025, while the top 40 percent of earners would see decreases. After-tax income for the bottom quintile would increase by 16.5 percent, largely from expanded tax credits. In contrast, the top 1 percent of earners would experience a 9.5 percent decrease in after-tax income.
The bottom quintile would see a slightly smaller 13.6 percent increase in after-tax income in 2034 on a conventional basis, while the top two quintiles would see decreases in their after-tax incomes. The top 1 percent would see a 7.3 percent decrease in after-tax income.
On a long-term dynamic basis, the smaller economy would reduce after-tax incomes relative to the conventional analysis. On average, tax filers in the top three quintiles would experience a drop in after-tax incomes, while the bottom quintile would still see an increase, albeit reduced to 11.8 percent, driven by the permanent changes to the CTC, EITC, and PTC.
Income Group | Conventional, 2025 | Conventional, 2034 | Dynamic, Long Run |
---|---|---|---|
0% - 20.0% | 16.5% | 13.6% | 11.8% |
20.0% - 40.0% | 2.9% | 3.4% | 1.6% |
40.0% - 60.0% | 0.5% | 0.4% | -1.4% |
60.0% - 80.0% | -0.2% | -0.5% | -2.3% |
80.0% - 100% | -3.3% | -2.8% | -4.9% |
80.0% - 90.0% | -0.8% | -0.9% | -2.8% |
90.0% - 95.0% | -1.0% | -1.1% | -3.2% |
95.0% - 99.0% | -2.3% | -2.2% | -4.8% |
99.0% - 100% | -9.5% | -7.3% | -9.5% |
Total | -1.2% | -1.1% | -3.1% |
Like the Biden administration, Harris’s tax plan puts a heavy emphasis on tax credits. Harris would restore the CTC expansion under the 2021 American Rescue Plan Act, which increased the credit from $2,000 under current law to $3,000 for older children and $3,600 for younger children for 2021 only. She would further increase the credit amount for newborns to $6,000, resulting in a CTC that provides $6,000 for children under one year old, $3,600 for children two through five, and $3,000 for children six and older. The ARPA expansion also removed work and income requirements to claim the credit, providing the maximum credit to qualifying individuals regardless of whether they had earned income, thus much of the expansion is technically spending administered by the IRS.
Tax Foundation estimates Harris’ CTC expansion would cost about $1.6 trillion over 10 years on a conventional basis. The expansion would shrink long-run economic output by about 0.1 percent by removing the credit’s phase-in and lengthening the credit’s phaseout, thus raising marginal tax rates for workers along both ranges. The smaller economy would result in further revenue losses for the federal government, increasing the fiscal cost to $1.7 trillion over the next decade.
Harris would extend or make permanent the expansion of health insurance PTC subsidies enacted under ARPA, which are set to expire at the end of 2025, and expand the EITC for single and joint filers who do not claim children on their tax returns. Over 10 years, permanence for the PTCs would cost about $238 billion, and the EITC expansion about $160 billion.
Harris also proposes several new housing tax incentives and penalties. For housing construction, she would expand the low-income housing tax credit (a similar proposal in the FY 2025 budget would cost $37 billion over a decade) and create a tax credit for the construction of starter homes. However, Harris would limit deductions for interest and depreciation Depreciation is a measurement of the “useful life” of a business asset, such as machinery or a factory, to determine the multiyear period over which the cost of that asset can be deducted from taxable income . Instead of allowing businesses to deduct the cost of investments immediately (i.e., full expensing ), depreciation requires deductions to be taken over time, reducing their value and discouraging investment. for large property investors.
Expanding a proposal in the FY 2025 budget, the Harris campaign proposes providing an average of $25,000 for all eligible first-time homebuyers, with additional support for first-generation homebuyers. Depending on how the subsidy is structured and limited, the fiscal cost would be about $100 billion over four years, based on the plan’s aim of reaching 4 million first-time homebuyers. Other housing credits and related subsidies specified in the FY 2025 budget would cost approximately another $100 billion over the next decade.
While the details are unclear, Harris has announced she would end taxes on tips for service and hospitality workers and work with Congress to establish guardrails on the policy. The exemption itself, and any safeguards added, would add to the complexity of the tax code overall while failing to benefit many low-income earners, given the small share of the population working in tipped occupations. We estimate that an exemption could cost around $118 billion over the 10-year budget window on a conventional basis.
Harris has proposed expanding the Section 195 deduction for business startup costs from its current level of $5,000 to $50,000. Based on past revenue estimates of similar proposals from the Joint Committee on Taxation, we estimate the change would reduce revenue by about $24.5 billion over the 10-year budget window on a conventional basis. The economic impacts are uncertain but small given the revenue impact; to the extent the policy allows more businesses to recover costs, it will boost business investment and potentially economic dynamism.
Many, but not all, of Harris’s housing policy proposals flow through the tax code. In terms of non-fiscal policy levers, the Harris plan includes regulatory streamlining to make construction easier, a crackdown on certain pricing tools in rental property management, and a new fund for public housing.
Harris’s reliance on subsidies for supply-constrained housing would be economically harmful for families, as it would boost demand and lead to higher housing prices. While some of her policies do target supply, like the expanded low-income housing tax credit and the credit for starter homes, these boutique tax breaks have not been effective historically .
Subsidies for different niches of the housing market are a poor substitute for better tax treatment of housing investment broadly. Multifamily housing construction still has not recovered to 1986 levels, as the Tax Reform Act of 1986 reduced the deductibility of investment.
Instead of reversing that poor tax treatment, the Harris package would further penalize rental housing construction by peeling back depreciation and interest deductions for certain large property investors, reducing investment incentives. These penalties would be in addition to a Biden-Harris administration proposal aimed at capping rent increases by disallowing certain deductions for depreciation.
Harris would deploy economically ruinous price controls in several other ways. Harris would cap the cost of insulin at $35 and out-of-pocket expenses for prescription drugs at $2,000 for all households, accelerate the speed of Medicare negotiations for prescription drug prices as part of the Inflation Reduction Act, and ban certain price increases for food and groceries.
Price controls harm consumers by reducing incentives to produce price-controlled goods. For example, the price controls on prescription drugs are likely deterring new drug development, resulting in up to 135 fewer drugs brought to market through 2039. Harris’s proposed price controls for groceries poorly address a problem that does not exist, as grocery profit margins are much lower than average across industries.
Harris’s subsidies would largely be funded by raising top tax rates on corporate and individual income to levels far above international norms.
The current top combined corporate tax rate—including the average of state rates—is 25.6 percent. Harris would increase it to 32.2 percent, the second-highest corporate tax rate in the OECD (behind Colombia ’s 35 percent).
The current top combined personal tax rate is 42.5 percent, consisting of the top federal rate (37 percent) and the average of state and local rates. This is about equal to the OECD average. Under Harris, the top combined rate would rise to 45.1 percent before accounting for the proposed 5 percent additional Medicare tax, half of which falls on the employer. Including the employee-side portion would raise the top rate to 47.6 percent.
The current top combined capital gains tax A capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. These taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment. rate is 29.1 percent, consisting of the 20 percent capital gains tax rate, the 3.8 percent NIIT, and the average of state and local income tax rates on capital gains. By taxing high earners’ capital gains at 28 percent and raising the NIIT to 5 percent, Harris’s proposals would raise the top tax rate on capital gains to 38.3 percent—the second highest in the OECD (behind Denmark ’s 42 percent). Similarly, under Harris’s proposals, the top tax rate on dividends would be nearly the highest in the OECD.
The combined integrated rate on corporate income reflects the two layers of tax corporate income faces: first at the entity level through corporate taxes and again at the shareholder level through capital gains and dividends taxes. Currently, the top combined integrated tax rate on corporate income distributed as capital gains is 47.2 percent. Under Harris’s proposals, it would rise to 58.1 percent—the highest in the OECD.
By placing a higher burden on work, saving, and investment, the Harris tax plan would reduce competitiveness and weaken key drivers of US economic growth, shrinking GDP by about 2.0 percent over the long run.
Tax policy has become a significant focus of the US 2024 presidential election.
We use the Tax Foundation General Equilibrium Tax Model to estimate the impact of tax policies, including recent updates allowing detailed modeling of US multinational enterprises . The model produces conventional and dynamic revenue and distributional estimates of tax policy. Conventional estimates hold the size of the economy constant and attempt to estimate potential behavioral effects of tax policy. Dynamic revenue estimates consider both behavioral and macroeconomic effects of tax policy on revenue. The model also produces estimates of how policies impact measures of economic performance such as GDP, GNP, wages, employment, capital stock, investment, consumption, saving, and the trade deficit.
Note, however, that our conventional and dynamic estimates for the stock buyback tax do not account for behavioral shifting from buybacks to dividends, which would also shift the individual income tax base The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. from capital gains to dividends.
Regarding Vice President Harris’s proposed changes to the GILTI regime, we modeled most of the major changes, including the 75 percent GILTI inclusion rate, country-by-country application, the reduction in the foreign tax credit (FTC) haircut to 5 percent, elimination of the qualified business asset investment (QBAI) exemption, and elimination of the foreign oil and gas extraction income (FOGEI) exclusion. We did not model the changes allowing carryforward of GILTI foreign tax credits (FTCs) and losses, repeal of the high-tax exemption for subpart F, or the tax increases on dual capacity taxpayers.
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A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
Here are some of the components of an effective business plan. 1. Executive Summary. One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.
Products and services description. When writing a business plan, the produces and services section is where you describe exactly what you're selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers.
This section of your simple business plan template explores how to structure and operate your business. Details include the type of business organization your startup will take, roles and ...
A business plan is a document that communicates a company's goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered. A business plan can highlight varying time periods, depending on the stage of your company and its goals.
How to Write a Business Plan Step 1. Create a Cover Page. The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions. A good business plan should have the following elements on a cover page:
There are 10 key parts of a business plan you'll need to complete: 1. Executive summary. An executive summary lays out all the vital information about your business within a relatively short space. It's typically one page or less and acts as a high-level overview that summarizes the other sections of your plan.
8. Request for Funding. Now for the really fun part of your business plan: officially asking for money. Your request for funding should start with what the investor will get by partaking in your small business. Spell out your capital needs, why you need them, and why providing them is beneficial to the funder.
Learn about the best business plan software. 1. Write an executive summary. This is your elevator pitch. It should include a mission statement, a brief description of the products or services your ...
Here is a basic template that any business can use when developing its business plan: Section 1: Executive Summary. Present the company's mission. Describe the company's product and/or service offerings. Give a summary of the target market and its demographics.
Related: First Steps: Writing the Executive Summary of Your Business Plan. 3. Business description. ... The sum of items six through 14 (material/merchandise, direct labor, overhead, marketing ...
Key Takeaways. A business plan is a document detailing a company's business activities and strategies for achieving its goals. Startup companies use business plans to launch their venture and to ...
Determine how you can best reach potential customers. Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you know your ...
10 Important Business Plan Components. Let's now understand the key components that make a sound business plan. 1. Executive summary. The executive summary is one of the most important parts of a business plan. It's the first thing potential investors will read and should therefore provide a clear overview of your business and its goals.
That's where your business plan comes in. It provides investors, lenders and potential partners with an understanding of your company's structure and goals. If you want to gain the financial autonomy to run a business or become an entrepreneur, a financial advisor can help align your finances. 1. Executive Summary.
Some entrepreneurs choose to use diagrams and charts, while others rely on text alone. Regardless of how you go about it, good business plans tend to include the following elements: Executive summary. Company description. Market analysis. Marketing plan. Sales plan. Competitive analysis. Organizational structure.
10 essential components of a business plan. Effective business plans contain several key components that cover various aspects of a company's goals. The most important parts of a business plan include: 1. Executive summary. The executive summary is the first and one of the most critical parts of a business plan.
Marketing plan: A strategic outline of how you plan to market and promote your business before, during, and after your company launches into the market. Logistics and operations plan: An explanation of the systems, processes, and tools that are needed to run your business in the background. Financial plan: A map of your short-term (and even ...
1. Executive Summary. The executive summary outlines the whole plan. You start with a clear introduction of who you are, what you sell, and what your ambitions are as a business. This section includes your mission statement, product description, and the basic overview of your company's structure. It should also include your financial plans.
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In this article, you'll see the framework of a 3-year business plan template, segment by segment, which will create "digestible bites" for your thought processes; one step at a time. The many benefits of creating a three-year business plan are just ahead, so let's get to work. Download our Ultimate Business Plan Template here >.
1. The executive summary. This is placed as number one on our list of components of a business plan, but it can easily be the final stage. That's because sometimes it's easiest to write your summary after you've covered all the other details. A great summary is one of the key features of a business plan. It serves as an overview of your entire ...
It is crucial to address several key items before the year-end. Menu. ... 3. Plan for Taxes. Whether 2024 was good, bad, or somewhere in between for your business, there will be tax strategy to ...
Disasters are inevitable; survival isn't. A well-thought-out disaster recovery and business continuity plan can make all the difference. From developing robust recovery strategies to leveraging ...
Vous avez un projet de création d'entreprise ? Le business plan (ou plan d'affaires) est un document écrit qui présente en détail votre projet de création entreprise. Le business plan sera l'outil pour convaincre les banques et les investisseurs. Nous vous expliquons comment faire un business plan étape par étape.
With platforms like Etsy and social media, artisans can reach a wider audience and turn their passion into a profitable business. However, to stand out in a crowded marketplace, it's crucial to have an effective marketing plan. In this article, we will explore four essential strategies to help you successfully market your handcrafted items.
Multichannel retail shopping is quickly becoming the norm for consumers in many industries. Multichannel shopping, however, has the potential to frustrate the historical "house of brands" strategies t.In 2013, Under Armour had $2.3 billion in sales yet only $500 million came from its women's apparel, and the company was ready to expand into the female market segment.
Sticking to your grocery budget is part of a smart overall financial plan. These tips can help you keep your grocery costs low so you can set money aside for other needs. ... 3. Shop Seasonal and Sale Items. ... She is co-founder and co-editor of nature-focused Rewilding Magazine and of Workshop, a small business magazine for makers and ...
With less than two months left in the 2024 presidential campaign, Vice President Kamala Harris has sketched out sufficient details of her fiscal and economic agenda for us to provide a preliminary analysis of the budgetary, economic, and distributional effects. On taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to ...