With Vice President Kamala Harris officially the presumptive Democratic nominee for President, the party can turn to a policy framework as it prepares for its convention in a few weeks. That includes how a President Harris would approach tax and fiscal policy.
As my TPC colleague Howard Gleckman observes, Harris made frequent use of the tax code to achieve her policy goals as a US Senator and 2020 presidential candidate. Although her record points to ways she could diverge from Joe Biden on economic policies, Harris has already affirmed her support for one key Biden tax principle: No tax increases for families earning under $400,000.
What about other big picture tax questions? Let’s chart the options.
If raising taxes on individuals earning under $400,000 is off the table, could Harris plan to fund programs by raising other taxes?
About 95 percent of tax filers make less than $400,000. To raise tax revenue, Harris would have to focus on increasing taxes on the top 5 percent of earners, who currently earn about 30 percent of income and pay 40 percent of taxes. Harris might seek more revenue to pay for spending programs by raising corporate income taxes and taxes on capital gains, which are largely paid by the highest earners.
Would Harris extend some or all of the 2017 Tax Cuts and Jobs Act provisions expiring in 2025?
Many aspects of individual income and estate taxes are set to revert to pre-2018 law next year. Absent Congressional action, taxpayers will see increases in individual tax rates, shifts in tax benefits for families, and a lower standard deduction while other itemized deductions increase.
If these provisions expire as scheduled, and other business tax increases kick in, about 75 percent of households will see their taxes increase. About 10 percent of households would see higher taxes, on the other hand, if TCJA were made permanent rather than being allowed to expire. (The remaining 15 percent would owe about the same either way.) Though it’s unclear how she could navigate this while maintaining her $400,000 tax pledge, Harris could broadly extend TCJA, renew provisions more selectively as the Biden campaign promised in 2020, or carve out a third option with a more dramatic rewrite of the tax code.
How would Harris approach tax credits for low-income tax filers and families, and other social policies that rely on the tax code?
As a 2020 presidential candidate and US senator, Harris introduced the LIFT (Livable Incomes for Families Today) Act, which would provide an additional subsidy for low-income workers’ wages on top of the Earned Income Tax Credit. As a senator, she cosponsored Child Tax Credit (CTC) expansions like those in the American Rescue Plan (ARP) and continued to support the ARPA’s CTC expansion as vice president. She also proposed tax credits for renters in the 2020 campaign and recently announced she would revive Biden’s “care economy” agenda, though without specifying if that would involve tax policy.
Harris might use tax policy to address a wide variety of social policy issues, and if so, would need to design overlapping tax credits that work together.
Would Harris continue Biden’s use of tariffs?
Prior to 2016, successive presidents of both major political parties encouraged international trade. That changed in 2018 when the Trump administration raised tariffs on China in an effort to reduce the US trade deficit. The Biden administration did not lower those tariffs, and in 2024, further raised tariffs on a large number of goods including steel, aluminum, semiconductors, and electric vehicle and battery technologies, alleging unfair trade practices. Harris could retain the 2017 tariffs and 2024 tariffs or raise tariffs on other goods and countries, both as foreign policy and to support domestic jobs and manufacturers.
Will Harris protect the IRS from budget cuts?
In the 2022 Inflation Reduction Act (IRA), Congress invested $80 billion in the IRS over the next decade—reversing a history of deep cuts while aiming to align the agency with ever-advancing technology. But because Congress clawed back over 25 percent of those funds and froze IRS appropriations for regular operations, the agency had to draw some IRA funds earlier than anticipated, meaning that IRA taxpayer services and modernization funding will also be depleted sooner than expected. Harris could support restoring the rescinded funds, releasing IRS appropriations, continuing IRA investment beyond 2031—or all the above.
November 5 is around the corner, leaving little time for detailed policy proposals. But Harris could start by answering these guiding questions about her tax agenda.
