Much has been written about the Biden-Harris administration’s tax doctrine, which says the IRS code offers too many breaks and loopholes for the rich and that the wealthiest Americans don’t pay their fair share.
If elected in November’s presidential contest, Vice President Kamala Harris will likely pursue higher taxes on the top 1% or 2% of households — but what would a Harris presidency mean for those on the other end of the socioeconomic spectrum?
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To find out, GOBankingRates spoke with Dennis Shirshikov, a professor in the economics department at the City University of New York, where he teaches finance, accounting and economics. A regular contributor to Time, Forbes and the Wall Street Journal, his courses address how governmental policy and taxes impact different socioeconomic classes — and he boasts an impressive 4.9-out-of-5-star rating from RateMyProfessor. A longtime real estate investor, he also serves as the head of growth at the vacation property investment platform GoSummer.
Here’s how he expects a Harris presidency to impact the tax burden on the low-income households that need the most help.
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Under America’s graduated rate system, the tax burden increases as income rises. The poorest households earning under $11,600 for individuals or $23,200 for married couples — less than full-time minimum wage — pay a 10% income tax. The rate gradually rises to 12%, 22%, 24%, 32%, 35% and finally 37% for individuals making more than $609,350 or married couples filing jointly with incomes of $731,200 or more.
The vice president believes the graduated rate system’s attempt at economic equity does not do enough to help low-income households retain enough of their finite resources.
“Harris is expected to advocate for tax policies that provide relief to low-income individuals and families,” said Shirshikov.
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According to Forbes, “It is too soon to know the details of […] Democratic presidential nominee Kamala Harris’s 2024 tax agenda. But her record as a U.S. senator and her short-lived 2020 presidential candidacy show that she has strongly supported using the tax code to advance social and economic ends, such as ending child poverty and addressing global climate change.”
Shirshikov agrees.
“Her proposals have included expanding tax credits such as the Earned Income Tax Credit (EITC) and the Child Tax Credit, which would increase the disposable income of lower-income households,” he said. “These measures are designed to alleviate poverty and reduce financial stress for those at the bottom of the income distribution.”
Here’s a look at some of her past and present proposals.
On July 31, Kiplinger wrote, “It’s important to note that specifics of Kamala Harris’ tax policy platform for her 2024 presidential campaign still need to be outlined.” However, the publication speculated that, based on her record, Harris would probably be open to expanding the Child Tax Credit that Shirshikov referenced.
During the pandemic, the American Rescue Plan raised the credit to $3,600 per child, which Kiplinger says “helped dramatically reduce child poverty rates.” The credit has since been scaled back to $2,000 per qualifying child, $1,700 of which is refundable — and the reduction hurt low-income families the most.
Kiplinger writes, “With the end of pandemic relief measures, child poverty rates unfortunately increased.”
According to Forbes, the LIFT Act was Harris’s signature proposal as a senator. The legislation, which never materialized, would have established a refundable tax credit that matched earnings of up to $3,000 for individuals making up to $50,000 or $6,000 for married workers earning up to $100,000.
Despite its prohibitive cost — $3 trillion over 10 years — and ultimate failure, Forbes writes, “LIFT was an exceedingly ambitious tax benefit aimed at boosting incomes for tens of millions of low- and moderate-income families.”
Another Harris initiative that never came to fruition would have issued a refundable credit to low- and moderate-income households. It targeted those who spend 30% or more of their income on rent, which experts say is the maximum percentage a household with healthy finances can spend on housing.
The Biden administration’s over-arching tax philosophy is that the rich avoid paying their fair share by exploiting too many loopholes and enjoying too many breaks. President Biden has repeatedly proposed raising taxes on the wealthy and offering credits to the less affluent. If elected, Harris is poised to adopt or expand upon that same doctrine — and Shirshikov isn’t the only expert who makes that prediction.
The nonprofit, nonpartisan Tax Foundation writes, “As a U.S. senator and 2020 presidential candidate, Harris supported steeper tax hikes and more aggressive redistribution through the tax code than President Biden.”
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. For more coverage on this topic, please check out I’m an Economist: Here’s What a Trump Win in November Would Mean for the Tax Burden on the Poor.
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This article originally appeared on GOBankingRates.com: I’m an Economist: Here’s What a Harris Win in November Would Mean for the Tax Burden on the Poor