How a Harris Win in 2024 Could Affect Corporate Earnings
Written by
Jordan Rosenfeld
Edited by
Amber Barkley
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Corporate earnings can be a controversial topic. Proponents suggest that allowing corporations to maximize profits tends to keep their business in the United States, benefiting everyone. Those that think corporations are not paying their fair share in taxes feel that higher taxes on them could trickle down to the average American instead.
How will Vice President Kamala Harris, in her bid for the presidency, navigate this thorny topic? So far in her short campaign bid, Harris appears to be falling in line with the Biden administration’s approach to corporate earnings.
Primarily, Harris has proposed to increase the corporate tax rate to 28%. According to the New York Times, this is estimated to bring in as much as $1.3 trillion in revenue over the next decade. The current 21% tax rate was a significant part of former President Donald Trump’s 2017 Tax Cuts and Jobs Act, when he cut the tax rate from 35%.
What It Takes To Raise the Tax Rate
Even if Harris were to win the presidency, it’s not a sure thing that she can make this tax hike come to pass, however. It could require having a majority in both the House and Senate, as Republicans will most likely oppose the increase.
NBC News suggested that if Democrats do not win a majority in both houses, Harris’s only leverage may sit in the fact that many other aspects of Trump’s tax cuts are expiring in 2025, which lays the table for open negotiations and for Harris to lead on setting tax policies.
Catering to the Middle Class
Harris’s position on corporate taxes aligns with her overall economic policy statements, which are aimed at improving and stabilizing the middle class.
Corporate tax cuts have not been shown to positively impact the average or lower-middle class American. They improve economic activity and earnings for the highest-income workers, largely managers and executives, according to the Center on Budget and Policy Priorities.
Harris’s tougher stance on the corporate tax stands in stark opposition to Trump’s, both in his former presidency and his current bid for the presidency.
In addition to supporting the Biden budget’s tax hikes, Harris has also endorsed raising the 1% tax on stock buybacks to 4% — another nod to the middle class that she’ll be going after high earners to pay their fair share, while making things potentially easier on the average American.
Changes to Multinational Corporations
Additionally, Harris has thrown her support as vice president along with President Joe Biden’s plan to increase and change how multinational companies’ foreign earnings are taxed in the United States. Biden wants to increase a global minimum tax from 10.5% to 21% — though it would account for variances in individual countries’ income levels.
The reasoning is to try and stop U.S. companies from moving to lower tax jurisdictions or to get out from under paying taxes. Under this new proposal, companies also would not be able to deduct the compensation of every employee who earns more than $1 million.
While corporations resist the threat of such increases, there’s little evidence that they would harm the average American, and might, in fact, improve things. Voters will make the final call on who becomes president — and leads the conversation on corporate taxes — in November.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
