The true cost of Kamala-nomics: US vice president’s crazy tax plan will cripple growth, says MAGGIE PAGANO

If you think Sir Keir Starmer’s warning of higher taxes to come is scary, then take a look at what America’s “Queen of Spoiled Children”, Vice President Kamala Harris, is planning if she wins the US election.

While the Democratic candidate has been light on policy on most issues, she has confirmed she backs most of the $5 trillion (£3.8 trillion) in tax increases included in President Joe Biden’s 2025 budget proposal, plus some of her own thrown into the mix.

Add it all up, and US economists are predicting that a Harris administration would result in the biggest tax increase in more than 40 years, raising personal income tax rates on top earners and corporations to some of the highest in the world.

That’s where Harris was called the “brat” kid, which TikTokers say means “carefree and cool.”

What the Democrats are proposing is nothing less than a brutal crackdown on the highest earners, the ultra-rich and corporations.

The paradox of this offensive is that many of the most generous Democratic donors include big names on Wall Street and in the business world, but they will be the ones who will be hit hardest.

In fact, his record favors even higher taxes than Biden’s.

But for now his main campaign message – offering tax cuts for lower-income earners and the middle class – while hitting the ultra-rich appears to be going down well with voters.

And that obviously suits donors too: the latest Reuters poll puts Harris four percentage points ahead of Trump.

His big blow to the business world is raising the federal corporate tax rate from the current 21 percent to 28 percent, a reduced rate introduced by President Trump.

It also proposes a top tax rate of 44.6 percent on capital gains and dividends, meaning the United States would have the highest corporate income tax rate in the developed world.

This tax increase is giving Harris juicy populist headlines as the increase would raise $1 trillion (£758bn) over the next decade.

However, what many always forget is that the more taxes are raised on corporations, the less they will invest in capital or employment.

It may be good for public relations, but it is not a great strategy for growth as the cost could be greater than tax revenues in the long run.

But that’s not all. There are at least 90 other proposals in Biden’s budget.

These include raising taxes on share buybacks to 4 percent; new global minimum taxes; a higher tax on interest earned by the private equity industry; increasing taxes on oil, gas and coal producers; a new 30 percent excise tax on the electricity costs of digital mining; and a higher inheritance tax, to name a few.

But there is one Harris bombshell that is causing particular consternation, if not genuine bewilderment, because it is so ridiculous that even her supporters are at a loss to explain how it would work.

This is his plan for a new 25 per cent minimum tax on income and unrealised capital gains for those lucky few who have more than $100m (£75.8m) in total wealth. You might say it doesn’t sound far-fetched.

After all, there are only 10,660 people in the United States with that kind of wealth. So why shouldn’t they pay some money for the privilege?

Because it would be an administrative nightmare and possibly unconstitutional.

A recent article in Cato at Liberty, the American think tank, also noted that such a proposal would potentially be a violation of privacy and individual property rights, as well as being unworkable.

It also completely changes the definition of income. For example, how do you account for losses when the value of an asset decreases?

Cato gives the example of Elon Musk’s net worth falling by a staggering $182bn (£138bn) in 2022.

That would have meant the US government would owe him $45bn (£34.1bn) as it would effectively have to pay back some of the taxes it had paid in previous years on gains that were only temporary. How crazy would that be?

We can only assume that Harris is playing to the public with such an outlandish proposition.

His donors will no doubt finish him off before he reaches the White House.

They are the real agents of power.