Taxes have become one of the hottest issues on the presidential campaign trail — and an area where the two candidates are trying to separate themselves from one another.
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In fact, Kamala Harris and Donald Trump have been talking extensively this campaign season about their plans for the economy. While some voters wish the candidates would provide more specifics about just how they plan to turn around the economy and help everyday Americans, Harris and Trump have each taken time to lay out some of their own ideas and attack those of their opponent.
Tax Cuts and Jobs Act of 2017
One thing to understand before looking at their individual plans is that whoever wins the White House in November will face trillions of dollars in expiring tax breaks. They were enacted by Trump through the Tax Cuts and Jobs Act (TCJA) of 2017.
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This is something many voters are watching because of the potential impact it could have on their finances. According to the Tax Foundation, “If Congress does nothing, most Americans will face higher taxes, worse incentives for work and investment, and a more complicated tax system starting in 2026.”
Overall, Trump and Harris have called for tax changes that could impact millions of Americans. Likewise, both have proposed tax cuts and increases that would require congressional approval.
Cutting Taxes
It’s probably not a surprise that both presidential candidates have talked about tax cuts this election season. After all, many voters like hearing about plans that could potentially lower the amount of taxes they pay.
It’s also probably no surprise that Trump plans to keep in place at least some of the individual and business tax cuts put in place through his TCJA. Per the Trump campaign, those tax cuts benefited millions of Americans and can help the millions of people who are dealing with the impacts of inflation and higher prices. Further, the campaign said the individual tax cuts and business tax reforms would help spur economic growth and confront higher costs of living without inflationary government spending.
Even if Harris herself hasn’t directly addressed TCJA extensions on the campaign trail, some democrats have shown support. President Joe Biden’s top economic advisor voiced support for partial extensions. According to the Tax Foundation, Harris has a record of favoring steeper tax hikes on businesses and people than Biden.
Increasing Taxes
Trump and Harris have both said they want to address the budget deficit, but they have very different ideas for raising revenue. Again, any tax law changes they offer would require approval by Congress.
Harris has said she’ll push to increase the corporate tax rate to 28%, up from the 21% put in place through the TCJA. Harris also proposed increasing taxes on high-income people, raising the top marginal income rate to 39.6% from 37%. She also suggested taxing investment gains of $1 million or more at the ordinary income rate instead of the lower capital gains rate.
For his part, Trump has called for sweeping tariffs, which are taxes levied on imported goods. Further, the former president suggested he’s looking at putting in place a policy of tariffs that would lead to the elimination of the federal income tax.
Eliminating Taxes on Tips and Social Security
Here’s one area where perhaps Trump and Harris agree: Eliminating income taxes on tip income. Both campaigns have talked about this idea. In fact, when Trump first suggested the idea, it was met with a mixed reaction. Now, Harris and other democrats have shown support for eliminating income taxes on tip income.
During his campaign, Trump has also called for no taxes on Social Security income. The future of Social Security has been a hot issue this election season due in large part to fears of how the program and related ones will be funded in the coming years.
Expanding the Child Tax Credit
As Trump and Harris have outlined their plans to help working American families, they’ve talked about expanding the Child Tax Credit. Per CBS News, “Lawmakers will be weighing how much help to give families using the Child Tax Credit and the standard deduction — or what portion of a taxpayer’s income should not be subject to taxes.”
In fact, Harris has talked about major expansions of the Child Tax Credit. She had announced an economic plan that includes an expanded Child Tax Credit worth up to $6,000 in total tax relief for families with newborns. Harris has also talked about expanding the earned income tax credit for filers who don’t claim children.
Trump is considering expanding the Child Tax Credit to a $5,000 universal credit.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Harris and Trump on Taxes: Comparing Everything They’ve Said and Who It’ll Impact
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