Vice President Kamala Harris’s tax plans would be disastrous for the US economy. She wants to raise individual and corporate taxes, as well as tax unrealized capital gains. Harris and her campaign cloak these proposals in the language of fairness and economic justice. In reality, they will stifle economic progress by killing incentives to save and invest. Punishing production and saving won’t create an “opportunity economy”—unless you work for the Internal Revenue Service.
Harris wants to raise income taxes on Americans earning more than $400,000 per year. That’s a hefty sum. It seems obvious that we’d want those earners bearing a larger share of the tax burden. The problem is, they already do. The top 1 percent of earners pay more than 45 percent of all federal income taxes. Raising rates will cause high earners to expend more resources sheltering their incomes, instead of investing in capital markets and contributing to economic growth.
The vice president also wants to raise corporate taxes from 21 percent to 28 percent. Keep in mind the OECD averageis 23 percent. Harris’s plan will immediately make American businesses less competitive in the global marketplace. Furthermore, contrary to Harris’s claims, c-suite fatcats won’t bear most of the costs. Consumers and workers pay for corporate tax hikes in the form of higher prices and lower wages, respectively. Businesses raise prices to cover the costs of larger tax bills, and worker compensation erodes due to reduced corporate capital formation.