As the election approaches, tax policies proposed by the Trump and Harris campaigns are a hot topic, since no matter what, they will impact both business owners and individuals. While tax policy may not be a deciding factor, understanding these differences may tip the scales one way or another. Here is what we know right now about the key tax proposals from each campaign.
Trump Campaign Tax Policies
- Continuing the 2017 Tax Cuts: Trump’s plan includes making the 2017 Tax Cuts and Jobs Act (TCJA) permanent, keeping the corporate tax rate at 21% and extending individual tax cuts.
- Middle-Class Tax Cuts 2.0: The campaign aims to introduce further tax cuts targeted at middle-income earners, potentially simplifying the tax brackets.
- Capital Gains Tax Reduction: Trump suggests reducing the top capital gains tax rate from 20% to 15%, which he says will boost investment.
Harris Campaign Tax Policies
- Reversing Parts of the TCJA: Harris aims to roll back tax cuts that primarily benefit corporations and high-income individuals, which could mean higher corporate taxes and increased rates for top earners.
- Tax Relief for Middle and Low-Income Households: Her proposals focus on expanding tax credits for childcare, healthcare, and other essential expenses to reduce the tax burden on working families.
- Increasing Taxes on Wealth Accumulation: Harris supports aligning capital gains tax rates with income tax rates for individuals earning over $1 million to address income inequality.
Comparison
- Corporate Taxes: Trump’s policies are designed to keep corporate taxes low to encourage business expansion, while Harris plans to increase taxes on corporations to fund social programs.
- Individual Taxes: Harris is looking to provide relief to middle and low-income families whereas Trump focuses on extending benefits for high earners.
- Capital Gains: Trump proposes a cut to stimulate investments, whereas Harris wants to increase rates for wealthy investors to address disparities in wealth distribution.
Keep in mind, this is still a broad overview of each campaign’s stated tax plans, and we may, or may not, get more details in the next few weeks. Either way, it is important to vote on November 5. Once we know the results of the election, we can help you understand any expected changes and optimize your tax and financial planning strategies.