As Kamala Harris and Donald Trump’s campaigns head toward the November election, both candidates are turning to new tax proposals designed to appeal to their bases and win over undecided voters.
While the two candidates have both touted populist tax proposals, their wildly different tax plans demonstrate their starkly different visions of how to spur economic growth and prosperity at the same time. Many Americans worry about being able to meet such basic needs such as buying food and accessing shelter.
Harris is proposing policies such as raising taxes on corporations and creating new tax credits, while Trump has promised to impose new tariffs and cut taxes on certain businesses. There isn’t much in common between the two, other than offering to eliminate federal taxes on tips.
As president, both candidates will struggle to make their promised changes unilaterally because taxation is controlled by Congress, not the executive branch. Neither side seems on track to make a huge dent house or The Senate A president has to ram his agenda through Congress, and it continues to be divided between potential control groups, a recipe for gridlock.
This makes these plans more about demonstrating an economic philosophy to voters than anything else. On economic concerns, Trump leads both of his Democratic rivals in the polls, and that dominance has proven difficult for Democrats; According to a New York Times/Siena College In a poll conducted last week, Trump leads Harris by 13 percentage points on the economy.
Harris is mostly on Biden’s charted path
As the current vice president, Harris is balancing support for the policies of the Biden administration where it makes sense politically while distinguishing himself — essentially trying to chart a path that appeals. Progressive Democrats call for higher taxes, Wealthy Democratic donors worry about higher taxesAnd everyone in between.
So far, Harris says he wants to:
- Set the capital gains tax rate at 28 percent
- Set the corporate tax rate at 28 percent
- new day small business Tax break up to $50,000
- Create a $25,000 tax credit for first-time home buyers
- Increase the Child Tax Credit for all parents, including providing a $6,000 credit to new parents
- Exclude certain taxes on tips
- Ensure no tax increase on people making less than $400,000
Democrats have been agitating for some of the above changes for years. Biden, for example, Capital gains tax is proposed to be increased – Basically, a tax on profits from selling something that increases in value over time, such as stocks or gold – at 39.6 percent. The current rate is 20 percent, meaning Harris’ proposed rate would be one An increase of eight percentage points. Harris’ proposal comes with some limitations: it would exempt income from paying stock dividends and would only apply Taxpayers with annual income of $1 million or more.
Harris’s proposed corporate tax rate — the amount that corporate entities would have to pay Pay on their income – The current federal rate will increase by 7 percentage points from 21 percent. This is consistent with Biden’s 2025 budget proposal, as is his proposal for a so-called “billionaires tax” that would impose 25 percent annual tax on unrealized gainsor an increase in the value of unsold assets such as stocks for people with assets of $100 million or more. New small businesses can currently claim a $5,000 rebate on their taxes, and Harris proposes giving them up to 10 times that.
The idea here, says Harris, is to confirm “Big corporations pay their fair share” But he also won praise for the plan from key Democratic donors: Mark Cuban, the billionaire investor, praised Harris “100 percent going to the center” after he announced the capital gains tax rate. His proposals, focused on middle-class and low-income Americans, reflect a similar, somewhat moderate populism.
his Subsidy for first time home buyers It’s intended to put homeownership within reach of more people, and he’s promised to revive a popular pandemic-era expansion of the child tax credit. Harris’ plan A $6,000 tax credit will be given to parents of newborn children, up to $3,600 in tax credits to those with children ages 2 to 5, and up to $3,000 in tax credits to children ages six to 17. Like Trump, Harris has promised to get rid of the tax on tips, albeit in a more limited fashion than his rival: The vice president’s plan would strike a federal income tax on tips, but Medicare and Social Security taxes will still be taken from tipped wages.
Finally, Harris would maintain personal income tax rates where Americans earn more than $400,000 a year. Americans are currently in the top tax bracket would see their income taxes return to the 39.6 percent they were before Trump’s 2017 tax cuts (up from 37 percent today), and have to Pay more Medicare taxes.
obviously, High capital gains and corporate taxes Harris’ proposed tax break would help offset lost revenue. The proposed child tax credit increase would cost $1.2 trillion over 10 years, and his housing credit plan would cost an estimated $100 billion; All told, accordingly Committee for a Responsible BudgetHarris’ proposal would increase the federal deficit by $1.7 trillion over the next decade.
Trump’s plans are geared toward corporations and the super-rich
Trump’s tax message is less about finding balance and more about maximalism: lower taxes for businesses, using taxes to promote his “America First” ideology and going further with populist promises than Democrats.
So far, Trump has said he plans to:
- Cut some corporate taxes to 15 percent
- Place a tariff of up to 20 percent on all imports (except from China, which will have a 60 percent tariff).
- Renew the personal tax cuts from 2017, even keeping the highest income tax brackets where they are
- Get rid of taxes on Social Security benefits
- Finish on the tips
During his first term, Trump oversaw a significant overhaul of the US tax code that, among other things, lowered the corporate tax rate to 21 percent. Now, he says the rate should be even lower — just 15 percent — For companies planning to manufacture in the United States.
Trump plans to revisit and expand another idea from his first term: tariffs. Trump’s 2018 tariffs on Chinese imports reversedStarted a trade war with China. At this time, he says he wants to see the tariff up 60 percent on goods imported from ChinaAs well as tariffs of up to 20 percent on all other imported goods. (So did Trump Allegedly contemplated (Getting rid of the income tax entirely and raising tariffs would make such a policy more than enough to compensate.)
Trump has made protecting U.S. industries a centerpiece of his campaign, but some economists believe his tariff policies could ultimately hurt American consumers.
“We should just call it a tax on imports because that’s what they are,” Dean Baker, a senior economist at the Center for Economic Policy Research, told Vox. “We import $4 trillion worth of goods every year. So that’s a $400 billion tax increase. It’s really a hit that’s overwhelmingly going to middle-income, middle-class people,” because the super-rich are more likely to spend their money abroad and on things other than consumer goods.
On the personal front, Trump has promised to extend his 2017 personal tax cuts. Again, Harris wants to extend these to all but the top earners; Trump would extend them to all Americans, regardless of income. (As will be cut All will be gone by the end of 2025Congress will have to figure out what to do about this tax cut regardless.)
Trump has also proposed eliminating taxes on Social Security benefits for senior citizens — which could save an individual about $560 per year. But doing so could cost up to $1.8 trillion and Further damages the Social Security Fundwhich Set to end in 2035.
Unlike Harris, Trump did not specify how his policy would eliminate the tax on tips. Assuming the tips are exempt from all taxes, however, His plan could cost up to $250 billion by 2035.
Vice President Candidate JD Vance floats a child tax credit increase $5,000 per child in the CBS interview, but Trump has yet to endorse that position.
As with Harris, it was not immediately clear how Trump would pay for the changes, which could be costly $7 trillion over 10 years. He floated Create a commissionPerhaps led by his billionaire ally Elon Musk, to cut waste, and proposed building one Sovereign wealth fund – Essentially, an investment fund at a national level – similar to Saudi Arabia and China, which According to TrumpFunding “great national endeavors,” paying down the national debt, and funding infrastructure projects—something that would normally be done with tax revenues and congressional appropriations.
