What will happen to your hard-earned money if Kamala wins?
Will Vice President Kamala Harris’ proposals raise taxes if she’s elected president, and who will this affect the most? Her campaign is new, and there are so many unanswered questions.
She doesn’t have a long campaign behind her, but the polls seem to suggest that voters like what they see. Taxes may be one of the critical issues many are looking at, regardless of whether they hope for big tax hikes on someone else or no tax hikes on themselves.
Harris’ repeat of Biden’s pledge not to raise taxes on those making under $400,000 a year was the most significant news.
Some say this will limit her ability to raise the kind of “big money” required for a major expansion of Social Security benefits, which would most likely require more of an across-the-board tax growth.
But it’s still too soon to tell how tax-driven and progressive the new candidate’s plans will be. Notably, the nonpartisan Tax Foundation has stated that in 2020, the $400,000 figure should be about $481,000 in 2024 dollars if we were to adjust for inflation.
In that sense, inflation might be seen as reducing the effectiveness of the tax pledge to a certain extent. The Tax Foundation has examined where Kamala Harris stands on taxes, primarily based on what the Vice President proposed when she last ran for president in the last election.
Even though she was a relatively short-term candidate in that race and got out early, we could see some of her central tax ideas from back then surfacing again in the months leading up to the election.
So, on that note, continue reading as Light On Politics looks at 10 ways Kamala Harris might affect your savings if he wins!
Top marginal income tax rate up to 39.6%
One of Kamala Harris’ opinions, favored by other Democrats, would increase the top marginal income tax rate on the top 1% of earners from the top rate of 37% currently up to 39.6%. As for a much wider rate hike, we don’t know anything for sure yet.
In 2019, she proposed a 4% tax idea called an income-based premium on households making over $100,000 annually to pay for a Medicare for All plan.
This idea seems ruled out now, given Kamala’s recent embracing of a hands-off policy on tax increases for those making $400,000 or less. But let’s wait and see. Maybe we’ll see an alternative proposal.
Your out-of-pocket healthcare costs could be impacted
If Harris becomes the next president, it might affect your healthcare spending. In 2020, Harris advocated for initiatives like Medicare for All, an expanded version of Medicare that provides coverage for everyone regardless of age or health status.
More recently, though, she switched to a more cautious approach. According to an article by KFF President and CEO Drew Altman, Kamala Harris’ proposals build upon the accomplishments under the Biden-Harris administration.
This includes negotiating lower out-of-pocket costs for medication and expanding access to private insurance plans. Affordability is the central theme, not universal coverage or healthcare as a right, value, quality, or access.
So, what will these healthcare proposals mean for the average Joe? Kamala Harris has proposed a cap on out-of-pocket drug costs of $2,000 annually. She has also proposed insulin copays capping out at $35 monthly.
She has advocated for nullifying some medical debt. If Kamala’s proposals are seen through, it could mean lower out-of-pocket expenses for the middle class. But, it’s also possible for spending on preventive care or other medical expenses to increase.
Green energy endeavors may lead to better incentives
When it comes to her stance on climate, Kamala Harris has yet to be entirely transparent. That said, under the Biden-Harris administration, there was much support for green energy and climate initiatives. In 2022, the Inflation Reduction Act was passed under President Joe Biden.
This package included $784 billion in funding for the nation’s shift into clean energy. Kamala Harris was the one who cast the deciding vote in getting this package passed. She has historically supported the Green New Deal, prioritizing using renewable energy.
If elected, she might continue to support similar ambitions that address climate change and sustainability in our country. This could lead to more incentives to buy energy-efficient home upgrades, electric vehicles, or solar panels.
For instance, a tax incentive of up to $7,500 on qualifying electric cars is available until 2032. For individuals, this could further promote spending in these areas, especially in states like California or New York, where green energy has become more of a focus.
Disposable income for daily services and goods
Disposable income is basically how much money you have after paying your taxes. It’s money that’s used for essentials like rent, mortgage, food and nonessential items. Kamala Harris has big plans to raise the federal minimum wage and exclude tips from federal taxes.
She once declared in a speech, “When I am president, we will continue our fight for working families of America, including raising the minimum wage and eliminating taxes on tips for service and hospitality workers.”
Theoretically, this could give people more funds for everyday goods and services. But, it depends on which policies are enforced and how they may influence the cost of these services and goods.
Estate taxes
In her 2020 presidential campaign, Senator Kamala Harris wanted to increase estate tax revenue to fund education programs. All the details of this weren’t entirely clear, but they likely meant cuts to the currently generous gift and estate tax exemption.
As of now, the federal estate and gift tax exemption is at $13.61 million for an individual or $27.22 million per married couple.
Though even without seeing any action from Congress, the per-person amount is set to plunge from $13.61 million to a mere $5.6 million after December 31st, 2025. But that will most likely be debated in Congress before the beginning of 2026.
More support for education and childcare
As far as we can see, Kamala Harris shares many of the same views as Biden regarding education… most notably higher education. She once stated, “Almost all students understand the struggle of student loans.
It’s time we make college tuition-free once and for all.” Around that time, Harris also supported the College for All Act. This bill would have made public colleges and universities accessible to anyone earning less than $125,000 a year.
Community colleges would have also become free, regardless of how much a person made. While this particular Act failed, the Biden-Harris administration has supported student loan forgiveness and similar initiatives.
Under the current administration, billions of dollars in federal student loans have been forgiven for thousands of borrowers.
So, it stands to reason that Kamala Harris will continue to fight for accessible higher education, which could make it more affordable even for lower-income families. Besides that, she advocated in the past for increased funding for early education and child care for working families.
As part of her economic platform, she’s also prioritizing the development of the federal child tax credit, which reduces these families’ tax bills.
While not directly affecting individual spending, these credits, initiatives, and subsidies could free up some cash for families with children.
What do YOU think about Kamala Harris and her views regarding YOUR finances? Please feel free to share your thoughts with Light On Politics in the comments section below.
And if you found this article useful, we highly recommend you also read: 10 Dumbest Political Statements You’ll Find Hard to Believe
