Donors of Democratic presidential nominee Kamala Harris are reportedly pushing her to give up her support of a plan that would tax wealthy Americans and increase federal revenue by $5 trillion over 10 years.
Last week, the vice president quietly unveiled her proposal to increase taxes. Notably, no one earning less than $400,000 would see their taxes increase, according to The New York Times.
President Joe Biden proposed — and Harris supported — a plan that would tax investment gains on Americans worth $100 million or more if they haven't sold the stocks, bonds or other assets that have appreciated. Those ultra-wealthy would see a 25 percent tax on a combination of income and unrealized gains, according to the Times.
The plan would raise the top marginal income tax rate from 37 percent to 39.6 percent, while also increasing Medicare surtax rates from 3.8 percent to 5 percent for wealthy Americans. Gains on investments would be taxed at the same rate as regular income for people earning at least $1 million a year.
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That proposal "hit a nerve" with some donors, according to the Times, which cited seven people familiar with the conversations. Those donors have passed their grievances up the chain to campaign advisers and key business allies. One reportedly brought up the issue to Harris in a private conversation, and pressed her to tweak the plan to instead tax the ultra-rich who borrow against their wealth.
A spokesman for the campaign told the Times that she believes the mega-wealthy should pay a minimum tax rate "because it’s not right that they pay a lower income tax rate than a teacher or firefighter." But at least one donor told the newspaper he and other leaders in Silicon Valley feel the plan is "quite punitive."
“There’s optimism that this can’t possibly be real,” tech CEO Aaron Levie said. He asked, "Is this a real proposal that is actually being pushed for — or was this something that was inherited from Biden?”
The pushback from wealthy donors comes as progressive advocates support the tax hike proposals.
"The superrich don't make their money the way most people do. Their money comes from owning businesses, property, financial assets, and inheritances," economist Michael Linden explained in a Wednesday social media post. "These types of income all enjoy special tax advantages, and that's why they end up paying less than middle-income Americans."
