Vice President Kamala Harris could be on her way to becoming the 47th president of the United States if the Democrats win big this November. If that happens, her plans could bring some big changes for taxpayers starting in 2025. So, what’s in store?
Financial expert and YouTube star Jaspreet Singh recently took a deep dive into Harris’ proposed tax plan. In a video posted on August 30th, he broke down how her ideas could affect Americans. Here’s a look at some of the key points Singh highlighted, plus a few updates on Harris’ tax proposals.
1. Tax Breaks for First-Time Homebuyers
Singh kicked things off by talking about Harris’ plan to help first-time homebuyers. She’s aiming to offer up to $25,000 in down payment assistance to the first 400,000 first-generation buyers or those whose parents don’t own a home.
On top of that, she’s proposing a $10,000 tax credit for all first-time homebuyers, which could be a game-changer for those looking to enter the housing market.
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2. Bigger Child Tax Credits
Next, Singh noted that Harris wants to increase the Child Tax Credit. Right now, it’s capped at $2,000, but under her plan, it could jump up to $6,000. This move could provide much-needed relief for many low-income families across the country.
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3. No More Taxes on Tips
For anyone who works for tips, here’s something that could catch your attention. Harris has proposed making tips tax-free at the federal level. So, tips you earn wouldn’t count as taxable income, meaning more cash in your pocket.
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4. Possible Changes to Income Tax Rates
Singh also touched on the potential changes to income tax rates. As it stands, Trump’s 2017 Tax Cuts and Jobs Act set the current tax brackets, but those are scheduled to expire in 2025.
If Harris becomes president, she might let that happen, which means tax rates would go up for most people.
Singh broke down the current income tax brackets and how they might change. Here’s a quick look at where we are now:
- Less than $11,600: 10%
- $11,600 to $47,100: 12%
- $47,100 to $100,500: 22%
- $100,500 to $191,900: 24%
- $191,900 to $243,700: 32%
- $243,700 to $609,300: 35%
- Over $609,300: 37%
If Harris allows Trump’s tax cuts to expire, tax rates could return to pre-2017 levels, which were higher for most brackets. According to Singh, Harris likely sees this as a way to raise revenue through taxes.
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Other Important Details from Harris’ Tax Plan!
After Singh’s video, more updates surfaced about Harris’ tax proposals. Here are some additional things to know:
- 28% Tax on Capital Gains: Harris supports taxing long-term capital gains at 28% for households making over $1 million a year. That’s lower than Biden’s proposed 39.6%, but still higher than the current 21% rate.
- Billionaire Minimum Income Tax: Harris is in favor of a minimum tax for those with a net worth over $100 million. The proposed rate is 25% on both taxable income and net unrealized gains, but this tax hasn’t made it through Congress yet.
- Quadrupling the Tax on Stock Buybacks: Harris backs increasing the tax on stock buybacks from 1% to 4%. This was part of the 2022 Inflation Reduction Act.
- More Deductions for Small Businesses: Harris wants to give small businesses a bigger tax break by increasing deductions from $5,000 to $50,000, making it easier for entrepreneurs to start and run businesses.
Harris’ tax plan could bring about big changes if she wins the presidency. Whether it’s providing relief for first-time homebuyers or potentially increasing income tax rates, Americans will have a lot to consider come 2025.