Vice President Kamala Harris has altered her stance on the capital gains tax, proposing a 28% rate instead of the previously envisioned 39.6%.

This adjustment follows a significant backlash after data showed that former President Donald Trump's economic approach was more favored among voters. A Reuters/Ipsos poll on August 27 showed that Trump had a 43% approval rating compared to Harris' 40%.

Harris' New Proposal

During her speech in New Hampshire on September 4, Harris laid out her revised tax plans. She proposed increasing the corporate tax rate from 21% to 28%.

Harris believes this rate will encourage investors to allocate more money to startups and small businesses. "We will tax capital gains in a way that benefits America's innovators, founders, and small businesses," Harris stated during her rally speech.

The Democratic presidential candidate still supports measures such as increasing the top marginal income tax rate to 39.6% from the previous 37% established during the Trump administration.

She also supports imposing a 25% minimum income tax on households earning more than $100 million. In addition, Harris favors increasing the current tax on corporate stock buybacks from 1% to 4%.

"We will tax capital gains in a way that benefits America's innovators, founders, and small businesses," Harris said during her rally speech.

Opposition and Challenges

If passed, the revised tax proposals would still face an uphill battle through the U.S. Congress. Several economic advisors and U.S. politicians have voiced their opposition.

On August 28, in an interview with CNBC's "Squawk Box," Harris' economic advisor, Bharat Ramamurti, faced stark opposition from the show's hosts. They called the proposed unrealized gains tax "unconstitutional" and "unfair."

In a subsequent interview on the same show on September 4, Democratic Congressman from California, Ro Khanna, expressed concerns.

He stated that taxing unrealized gains could force entrepreneurs to sell their companies prematurely, leading to negative economic consequences like consolidating startups under larger private equity firms.

Economic Incentives for the Working Class

To present herself as a more economic-friendly candidate, Harris proposed a series of economic incentives to aid the working class in the U.S. One of her first proposals was to reduce the tax on small businesses from $50,000 to $5,000, a tenfold decrease.

She also promised to enact a federal ban on price gouging, which would lower the price of groceries and everyday costs for ordinary Americans. Additionally, Harris proposed expanding the current child tax credit from $2,000 to $3,600 per year, paid in monthly installments.

These incentives, coupled with a softer stance on capital gains tax, are part of Harris' strategy to present herself as a more favorable candidate. She aims to woo more support from higher-earning individuals and bolster her economic credentials.