What a Kamala Harris Presidency Could Mean for Your Income
Written by
Crystal Mayer
Edited by
Zuri Anderson
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
Ever since being thrust into the spotlight as the Democratic nominee, presidential candidate and current Vice President Kamala Harris has made no secret of her desire to advocate for lower and middle-income families. At a campaign speech in Raleigh, North Carolina, Harris said, as president, she would be “laser-focused on creating opportunities for the middle class that advance their economic security, stability, and dignity.”
Even before her candidacy, Harris supported tax relief for middle-income earners. As a senator, she championed the LIFT (Livable Incomes for Families Today), the Middle-Class Act, which called for giving a $3,000 refundable tax credit to middle and working-class Americans. As a presidential nominee, she has expanded on this concept, offering an economic plan that may put more money in the hands of average-income earners throughout the country. Here is what a Harris presidency could mean for your income.
Fewer Taxes on Your Tips
Hospitality and service workers may pay less in taxes under the Harris presidency. The vice president has endorsed a “no tax on tips” proposal that has support from both sides of the aisle. Her opponent, former President Donald Trump, has argued that he was the first to present the idea.
Under Harris’ plan, service workers earning less than $75,000 a year or less would be exempt from paying federal income taxes on their tips. Earnings gained from tips, however, would still be subject to payroll taxes. If passed, service workers could see a significant reduction in their taxes, allowing them to keep more of their income.
An Expanded Child Tax Credit
On the campaign trail, Harris has made it clear that she would restore the expanded child tax credit initiated in 2021. The tax credit would give parents up to $3,600 for children. She has also proposed a new $6,000 tax credit for qualifying families with a child under a year old. If passed, this can help to lift children out of poverty. The idea, however, is likely to meet opposition in Congress.
No New Taxes If You Earn Under $400,000
Harris has echoed her predecessor’s promise not to raise taxes on people earning less than $400,000. According to Forbes, the average annual salary nationwide is $59,428, meaning that many people will fall under this category.
Lower Drug Costs
Another way that a Harris presidency may impact your income is by lowering drug costs. Throughout her campaign, Harris has pledged to continue reducing the cost of prescription drugs. She has advocated continuing the “$35 monthly cap on out-of-pocket costs for insulin” and expanding the $2,000 yearly limit on out-of-pocket drug costs to all Americans, not just Medicare recipients.
A Higher Corporate Tax Rate
If Harris’ proposals are embraced, many individuals could receive tax credits, while corporations may pay a higher tax rate. The vice president has advocated raising the corporate tax rate to 28% to help offset the costs of some of her other promises. The corporate tax rate currently sits at 21%, set by the 2017 Tax Cuts and Jobs Act.
The increase in the corporate tax rate could help ensure that Harris’ other proposals see the light of day. However, many of these will still have to pass a Congress that may not be willing to concede on many issues.
Support for First-Time Homebuyers
Lastly, first-time homebuyers could see a boost from the government if Harris is elected. The presidential candidate has proposed providing $25,000 in “down-payment support for first-time homebuyers.” The down-payment support could help qualifying first-time buyers break into a notoriously difficult housing market. Her plan would also give these buyers a $10,000 tax credit.
In addition to these proposals to help first-time homebuyers, Harris has called for the construction of three million new housing units by the end of her first term. For low- and middle-income families, these housing incentives could help to ensure that they have more money at the end of the day.
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
