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Early voting for the 2024 election has already kicked off in some states, but voters are still seeking additional information on the candidates\u2019 platforms, including their tax proposals. The details can be hard to come by \u2014 and additional proposals continue to emerge from the candidates. Here\u2019s a breakdown of some of the most notable tax-related proposals of former President Donald Trump and Vice President Kamala Harris.<\/p>\n
Expiring provisions of the Tax Cuts and Jobs Act (TCJA)<\/strong><\/p>\n Many of the provisions in the TCJA are scheduled to expire after 2025, including the lower marginal tax rates, increased standard deduction, and higher gift and estate tax exemption. Trump would like to make the individual and estate tax cuts permanent and cut taxes further but hasn\u2019t provided any specifics.<\/p>\n As a senator, Harris voted against the TCJA but recently said she won\u2019t increase taxes on individuals making less than $400,000 a year. This means that she would need to extend some of the TCJA\u2019s tax breaks. She has endorsed President Biden\u2019s 2025 budget proposal, which would return the top individual marginal income tax rate for single filers earning more than $400,000 a year ($450,000 for joint filers) to the pre-TCJA rate of\u00a039.6%.<\/p>\n Harris has also proposed increasing the net investment income tax rate and the additional Medicare tax rate to reach 5% on income above $400,000 a year.<\/p>\n Business taxation<\/strong><\/p>\n Trump has proposed to decrease the corporate tax rate from its current 21% to 20% (or even lower for companies making products in America). In addition, he\u2019d like to eliminate the 15% corporate alternative minimum tax (CAMT) established by the Inflation Reduction Act. On the other hand, Harris proposes raising the corporate tax rate to 28% \u2014 still below the pre-TCJA rate of 35%. She has also proposed to increase the CAMT\u00a0to\u00a021%.<\/p>\n In addition, Harris has proposed to quadruple the 1% excise tax on the fair market value when corporations repurchase their stock, to reduce the difference in the tax treatment of buybacks and dividends. She would block businesses from deducting the compensation of employees who make more than $1\u00a0million,\u00a0too.<\/p>\n In another proposal, Harris said she\u2019d like to increase the current $5,000 deduction for small business startup expenses to $50,000. The proposal would allow new businesses to allocate the deduction over a period of years or claim the full deduction if they\u2019re profitable.<\/p>\n Individual taxable income<\/strong><\/p>\n Trump has proposed to eliminate income and payroll taxes on tips for restaurant and hospitality workers. Harris has proposed exempting tips from income taxes. But some experts argue that such policies might prompt employers to reduce tipped workers\u2019 wages, among other negative effects. Harris\u2019s proposal also includes provisions to prevent wealthy individuals from restructuring their compensation to avoid taxation \u2014 by, for example, classifying bonuses as\u00a0tips.<\/p>\n Trump recently proposed excluding overtime pay from taxation. Experts have similarly said this would be vulnerable to abuse. For example, a salaried CEO could be reclassified as hourly to qualify for overtime, with a base pay cut but a dramatic pay increase from overtime hours.<\/p>\n In another proposal, Trump said he would like to exclude Social Security benefits from taxation.<\/p>\n Child Tax Credit<\/strong><\/p>\n Trump\u2019s running mate, Senator J.D. Vance, has proposed a $5,000-per-child Child Tax Credit (CTC). However, it\u2019s unclear if Trump endorses the proposal. Of note, Senate Republicans recently voted against a bill that would expand the\u00a0CTC.<\/p>\n Harris has proposed boosting the maximum CTC from $2,000 to $3,600 for each qualifying child under age six, and $3,000 each for all other qualifying children. She would increase the credit to $6,000 for the first year of life. Harris also favors expanding the Earned Income Tax Credit and premium tax credits that subsidize health insurance.<\/p>\n Capital gains<\/strong><\/p>\n Harris proposes taxing unrealized capital gains (appreciation on assets owned but not yet sold) for the wealthiest taxpayers. Individuals with a net worth exceeding $100\u00a0million would face a tax of at least 25% on their income and their unrealized capital gains.<\/p>\n Harris is also calling for individuals with taxable income exceeding $1\u00a0million to have their capital gains taxed at ordinary income rates, rather than the current highest long-term capital gains rate of 20%. Unrealized gains at death also would be taxed, subject to a $5\u00a0million exemption ($10\u00a0million for married couples) and certain other exemptions.<\/p>\n Housing incentives<\/strong><\/p>\n Trump has alluded to possible tax incentives for first-time homebuyers but without any specifics. The GOP platform calls for reducing mortgage rates by slashing inflation, cutting regulations and opening parts of federal lands to new home construction.<\/p>\n Harris proposes new tax incentives intended to address housing concerns. Among the proposals, she would like to provide up to $25,000 in down-payment assistance to families that have paid their rent on time for two years. She\u2019s also proposed more generous support for first-generation homeowners. In addition, she proposes a tax incentive for homebuilders that build starter homes for first-time homebuyers.<\/p>\n Tariffs<\/strong><\/p>\n Trump repeatedly has called for higher tariffs on U.S. imports. He would impose a baseline tariff of 10%, with a 60% tariff on imports from China. (In speeches, he\u2019s proposed a 100% tariff on certain imported\u00a0cars.)<\/p>\n Trump has also suggested eliminating income taxes completely and replacing that revenue through tariffs. Critics argue that this would effectively impose a large tax increase (in the form of higher prices) on tens of millions of Americans who earn too little to pay federal income\u00a0taxes.<\/p>\n The bottom line<\/strong><\/p>\n As of this writing, nonpartisan economics researchers project that Trump\u2019s tax and spending proposals would increase the federal deficit by $5.8\u00a0trillion over the next decade, compared to $1.2\u00a0trillion for Harris\u2019s proposals. That assumes, of course, that all the proposals actually come to fruition, which depends on factors beyond just who ends up in the White House. Congress would have to pass tax bills before the president can sign them into law. Turn to us for the latest tax-related developments.<\/p>\n \u00a9 2024<\/em><\/p>\n <\/body> Early voting for the 2024 election has already kicked off in some states, but voters are still seeking additional information on the candidates\u2019 platforms, including their tax proposals. The details can be hard to come by \u2014 and additional proposals continue to emerge from the candidates. Here\u2019s a breakdown of some of the most notable […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,59,10],"tags":[8,11,12],"class_list":["post-17034","post","type-post","status-publish","format-standard","hentry","category-articles","category-etra","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=17034"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17034\/revisions"}],"predecessor-version":[{"id":17035,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17034\/revisions\/17035"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=17034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=17034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=17034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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