4 Impacts a Harris Presidency Could Have on Large Corporations and Their Taxes
Written by
Vance Cariaga
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Cory Dudak
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Because of her late start in the 2024 presidential campaign, vice president and presumptive Democratic nominee Kamala Harris has not had much time to roll out an economic platform. She was expected to do so this week, though what she unveils might not include a lot of details — including those having to do with corporate taxes.
“Their goal is going to be to talk about moving forward, criticize (ex-President Donald) Trump’s policy proposals, but really avoid laying out a broad based agenda that Republicans could then work to undermine,” Chris Meekins, Washington policy analyst at Raymond James, told MarketWatch.
Harris has “abandoned” policy proposals she adopted in 2019 during her first run for the presidency, a campaign spokesperson told MarketWatch. Those proposals included a ban on fracking and a federal jobs guarantee.
More should be known about the vice president’s tax policies in the coming days and weeks. For now, many observers predict that she’ll roll out a more progressive tax agenda than President Joe Biden.
Here are four potential tax impacts a Harris presidency could have on large corporations.
An End to the TCJA
As a presidential candidate leading up to the 2020 election, Harris proposed replacing the 2017 Tax Cuts and Jobs Act signed by ex-President Donald Trump. Among other things, the TCJA lowered the corporate income tax rate from 35% to 21% and. The law is due to expire in 2025, and Harris is unlikely to extend it, which means rates will return to their pre-TCJA levels.
Environmental Tax Policies
Harris has “made it clear” that she supports economic policies that “drive a green transition,” Forbes reported. In 2019 she cosponsored a Senate resolution to establish a “Green New Deal,” and in her 2020 presidential campaign she called for a U.S. carbon tax along with a fee on carbon polluters.
As president, Harris might pursue a green agenda that includes rolling back certain tax deductions and foreign tax credits for big oil companies. As Forbes noted, she also has supported the Electric CARS Act of 2018 and the Electric CARS Act of 2019, which would have expanded tax credits for electric vehicles.
What this means is that corporations with large stakes in fossil fuels could face higher taxes, while those that work in the green economy could benefit from tax breaks.
Lower Tariffs
When he was president, Trump “instigated a trade war” by imposing about $80 billion of tariffs on imports of various goods from overseas, according to the Tax Foundation. These included washing machines, solar panels, steel, aluminum and “billions of dollars’ worth” of consumer, intermediate and capital goods from China.
As the Tax Foundation noted, the Biden-Harris administration has retained most of the trade war tariffs and even proposed increases of its own. But Harris herself has “demonstrated a better understanding of the downsides of tariffs,” saying she is not a “protectionist Democrat” and blasting “Trump’s trade tax” that was “taxing American consumers.”
Since tariffs are essentially a tax on imported goods, a Harris presidency could be a positive for corporations (and consumers) by easing tariffs and helping the United States avoid escalating the trade war. However, critics may argue that allowing inexpensive Chinese imports to go untaxed damages domestic industry and production.
Tax Deductions for Certain Legal Claims
As a U.S. senator, Harris introduced her first tax-related bill in June of 2018 with a bipartisan measure called the Ending the Monopoly of Power Over Workplace Harassment Through Education and Reporting Act. That legislation sought to block employers from deducting expenses they incur from defending or settling harassment and discrimination claims, Forbes reported.
The Internal Revenue Code blocks employers from deducting certain payments related to sexual harassment and sexual abuse claims. These include the following, per Forbes:
- Any settlement or payment related to sexual harassment or sexual abuse if the settlement or payment is subject to a nondisclosure agreement.
- Attorney fees related to that settlement or payment.
Should Harris win in November, corporations can expect her to back similar legislation governing tax deductions for these types of claims.
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.
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