The Harris campaign proposals would reduce taxes on low- and middle-income households by expanding the Child Tax Credit (CTC), expanding the Earned Income Tax Credit (EITC), increasing premium subsidies for health insurance under the Affordable Care Act (ACA), and providing down payment assistance to qualified first-time homebuyers. It would also increase corporate taxes to partially offset the costs of those proposals. More specifically:
- Expanding the Child Tax Credit. Under current law, eligible families receive a tax credit of up to $2,000 per child, a portion of which is refundable ($1,700 in 2024). Starting in 2026, the total credit amount will decrease to $1,000. Under the Harris campaign policy proposal, starting in 2025 the credit amount would instead permanently increase to $3,600 per child 5 years and younger, and to $3,000 per child older than 5 years. The proposal would also increase the maximum age of eligible children from 16 to 17 and make the credit fully refundable. These proposed permanent changes generally correspond to the temporary CTC provisions enacted under the American Rescue Plan Act (ARPA). Furthermore, families with newborns would receive an additional $2,400 fully refundable credit during the first year of the child’s life, bringing the total maximum credit value to $6000 for newborn children.
- Expanding the Earned Income Tax Credit. Under current law, in 2024, the earned income tax credit for childless workers has a much less generous maximum credit value and phasing structure than the EITC for workers with children. The policy proposal from the Harris campaign would adjust the credit structure to be more generous to workers without children, generally in line with the temporary EITC expansion under the ARPA, on a permanent basis. In addition to the adjusted maximum credit and phasing structure, the proposal would also set the eligible age range to 19 and above, whereas the current law age range is 25-64.
- Permanently extend enhanced premium tax credits. This proposal would extend the lower contribution percentages of household income used for determining the premium tax credit under the ACA, as previously enacted in the ARPA and extended by the Inflation Reduction Act (IRA). Those parameters are set to expire, rendering the subsidies less generous after 2025; this policy would instead make them permanent.
- Providing down payment support for qualified first-time homebuyers. This proposal would provide an average of $25,000 in assistance to qualified first-time homebuyers. The benefit would be available for four years. Although the Harris campaign included few details, it cites a closely related Biden-Harris administration proposal from earlier this year. We assume that details not provided would broadly follow the prior proposal.
- Raise the corporate income tax rate to 28 percent. Under current law, corporations pay a statutory tax rate of 21 percent on their taxable income. This proposal would raise that rate to 28 percent. That would reverse one half of the statutory corporate tax rate reduction enacted as part of the 2017 Tax Cuts and Jobs Act, which lowered the rate from 35 percent to 21 percent.