Vice President Kamala Harris is breaking away from President Joe Biden's 2025 budget proposal by suggesting a lower long-term capital gains tax rate for wealthy Americans. During an economic speech in New Hampshire on Wednesday, Harris proposed increasing the rate to 28% instead of the 39.6% proposed by Biden.

The current long-term capital gains tax rate stands at 20%, with an additional 3.8% tax for higher earners. This tax is paid when investments are sold or gains are realized. However, Biden's budget aims to raise the rate to 39.6% for households with taxable income over $1 million.

Harris, according to sources familiar with the matter, believes that a 39.6% rate is too high. While she still supports higher tax rates for the wealthiest individuals and corporations, she argues that a lower capital gains rate would encourage investors to invest more in startups and small businesses.

In addition to proposing a lower capital gains tax rate, Harris also suggested increasing the corporate tax rate to 28%, up from the current 21% rate set by the Tax Cuts and Jobs Act of 2017 under the Trump administration.

Harris's advisers have indicated that she supports allowing many of the Trump-era tax cuts for the wealthy and big corporations to expire. This approach would provide funding for more targeted programs for families and small businesses.

During her speech in New Hampshire, Harris emphasized her vision of an opportunity economy, where everyone has an equal chance to succeed and build wealth, including intergenerational wealth. She highlighted the importance of small businesses as an essential foundation of the entire economy.

Biden's budget proposal includes other tax increases on the wealthy, such as raising the top marginal income tax rate to 39.6% and implementing a 25% minimum income tax on households with a net worth of over $100 million. Harris expressed her support for the Billionaire Minimum Income Tax measure, which would impose taxes on unrealized gains on assets, unlike the current law.

Furthermore, Harris endorsed quadrupling the tax on stock buybacks to 4%. This levy was established through the Inflation Reduction Act, which was enacted by Democrats in 2022.

Harris is striving to position herself as more moderate in certain areas of economic policy while embracing elements of a populist platform. Some of her proposals include a $25,000 credit for first-time homebuyers, a $6,000 child tax credit for newborns, and federal investigations into retail grocery pricing.

This shift in policy comes as Harris aims to establish her own identity and distance herself from Biden's policies. Democratic strategist James Carville noted the importance of differentiating herself from the administration's policies to present herself as a forward-looking candidate.

Alongside her economic policy rollout, Harris has proposed a substantial tax deduction for small businesses, raising it from a maximum of $5,000 to $50,000. She has also pledged to reduce red tape to make it easier for small businesses to operate. Additionally, she supports a federal ban on price gouging and a permanent expansion of the child tax credit.

Another notable aspect of Harris's plan is her intention to end the federal income tax on tips, much to the ire of former President Donald Trump. However, under Harris's proposal, tips would still be subject to payroll taxes.

By presenting her economic policy proposals, Harris seeks to address key issues facing the American economy and demonstrate her commitment to fostering an opportunity economy that benefits all individuals and businesses alike.