Trump vs. Harris: The Battle of Tax Policies 🚀

As the United States gears up for the 2024 presidential elections, the tax policies of the leading candidates—Donald Trump and Kamala Harris—are on completely different tracks. Let’s dive deep into the distinct approaches and what they mean for American households and businesses.

Trump’s Tax Strategy 🏢

Donald Trump aims to borrow much of his tax policy plans from his previous tenure in the White House.

Extending the 2017 Tax Cuts

The 2017 Tax Bill introduced significant changes, including lower tax rates, increased Standard Deduction, and a doubling of the Child Tax Credit. These changes are set to expire at the end of 2025. Trump wants to:

• Extend the 2017 tax cuts, which could lead to more than $4 trillion in lost federal revenue over ten years.
• Propose new tax cuts costing over $6.5 trillion over a decade.

Targeted Corporate Tax Reductions

Trump advocates for a lower corporate tax rate of 15% that would only apply to companies manufacturing within the U.S., estimated to reduce federal revenue by $200 billion over ten years.

Eliminating Income Tax on Social Security Benefits

Another key proposal is ending the income tax on Social Security benefits:

• This change could cost the federal government $1.8 trillion over a decade.
• It’s primarily targeted at retirees who have additional income sources apart from Social Security.

Increased Tariffs and Repealing Clean Energy Credits

• Trump suggests imposing 10-20% tariffs on imported goods, particularly from China.
• This could generate up to $3 trillion over a decade but raise the cost of goods for middle-income households by $1,700 a year.
• He also wants to repeal Clean Energy Credits established under the 2022 Inflation Reduction Act.

Harris’s Tax Plan: A Different Path 🏠

Kamala Harris’s tax policies are crafted along the lines of President Joe Biden’s existing plans but take them several steps further.

Tax Cuts for Middle and Lower-Income Families

Harris aims to cut taxes for households making under $400,000 a year:

• Extending current tax cuts for these households could cost about $2.8 trillion over a decade.

Enhanced Child Tax Credits

Compared to the Biden proposal, Harris plans to:

• Provide $6,000 in tax relief for families during the first year of a child’s life.
• Expand credits to $3,600 for children under six and $3,000 for older children.
• This ambitious Child Tax Credit Plan is expected to cost $1.2 trillion over ten years.

First-Time Home Buyer Tax Credit

In her quest to make housing more affordable, Harris proposes:

• A $25,000 tax credit for first-time homebuyers, compared to Biden’s $10,000 proposal.
• This initiative would cost around $100 billion, aimed at mitigating housing affordability issues.

Increased Taxes on Corporations and the Wealthy

To fund her policies, Harris plans on generating nearly $5 trillion in revenue by:

• Raising the corporate tax rate to 28%.
• Increasing taxes on households earning over $400,000, bringing in approximately $1.8 trillion.
• Introducing a 25% minimum income tax on individuals with a net worth of over $100 million, focusing on unrealized capital gains and appreciated assets.

The Political Landscape 🏛️

Both Trump’s and Harris’s ambitious tax proposals hinge significantly on the political landscape post-2024 elections. A president aligned with the majority in Congress could potentially implement their respective tax plans without substantial hurdles.

• If Trump gains the White House along with a Republican House and Senate, expect major tax cuts and revised tariffs.
• Should Harris win alongside a Democratic majority in Congress, her tax increases on corporations and the wealthy, coupled with extended tax cuts for middle and lower-income families, would likely come into effect.

The real challenge lies in the potential for a divided government. Without clear control over both legislative chambers, the risk of expiring tax cuts at the end of 2025 looms large, potentially leading to significant tax increases for most households.

Conclusion: A Taxing Decision 🗳️

Both candidates present vastly different tax architectures that aim to reshape who pays taxes in America. While Trump’s plan leans heavily toward cuts funded partially by tariffs, Harris focuses on tax cuts for the middle and lower-income brackets funded by increasing taxes on corporations and the wealthy.

As we approach the 2024 elections, these proposals will be highly scrutinized, debated, and assessed for their potential impacts on the American economy and its citizens.

Stay tuned as we continue to break down the policies and their implications in the months leading up to the election. Your wallet’s future could depend on it! 💵