US Election and Tax: Harris v Trump – Introduction
As the 2024 general election approaches, tax policy has become a key issue that voters and lawmakers are closely watching.
With both major presidential candidates offering distinct proposals and control of Congress up for grabs, the outcome of the election will have significant ramifications for the future of tax legislation in the United States.
This pre-election analysis delves into the key tax policy proposals from former President Donald Trump and Vice President Kamala Harris, and what we might expect from key congressional leaders on tax policy in the 119th Congress.
The Tax Cuts and Jobs Act (TCJA) and Its Future
The Tax Cuts and Jobs Act (TCJA) of 2017 brought substantial changes to the US tax code, but many of its provisions are set to expire at the end of 2025.
These expiring provisions include tax cuts for individuals, lower tax rates, and an expanded child tax credit.
For businesses, changes will affect the expensing of investments and the 20% deduction for certain business income, although the 21% flat corporate tax rate will remain in place.
If Congress does not extend or make these provisions permanent, taxpayers could face higher rates and reduced benefits.
The direction of these discussions will largely depend on the outcome of the November election, with potential scenarios ranging from extending the TCJA’s provisions to completely reversing them.
Kamala Harris – future tax policy
Vice President Kamala Harris has made tax policy a central theme of her campaign. Building on the Biden-Harris administration’s work, particularly the Inflation Reduction Act (IRA) of 2022, Harris is expected to focus on tax credits that promote energy efficiency and green initiatives.
The IRA includes tax credits for clean energy investments, energy-efficient improvements, and electric vehicles.
These incentives are designed to drive innovation and support sustainable economic growth.
Additionally, Harris has proposed significant changes aimed at reducing economic inequality, such as increasing taxes on corporations and high-income earners, expanding the Child Tax Credit, and introducing tax incentives for affordable housing.
Harris’s approach to tax policy is expected to be in line with the Biden administration’s strategies, with some nuanced differences.
She has already outlined plans to raise taxes on those earning over $400,000 annually and to close corporate tax loopholes.
Harris has also proposed using tax incentives to combat climate change and support the construction of affordable housing.
Her administration would likely continue to push for a tax system that supports working families, reduces inequality, and advances sustainability.
The return of Trump – future tax policy
During his first term, Donald Trump championed the TCJA, which lowered both individual and corporate tax rates.
In his bid for a second term, Trump has proposed further reducing taxes, particularly for high-income earners and businesses, to stimulate economic growth.
His proposals include extending the tax cuts from the TCJA, lowering the corporate tax rate, eliminating the estate tax, and reversing certain aspects of the Inflation Reduction Act, such as the corporate alternative minimum tax. T
rump’s tax policy priorities focus on reducing tax burdens, fostering investment, and encouraging economic expansion.
If Trump returns to the White House, we can expect an aggressive push to weaken some of the tax provisions introduced under the Biden administration, particularly those related to green energy.
Trump may also seek to leverage the Treasury Department and the IRS to implement changes without needing new legislation, especially if Congress does not support his efforts.
Common grounds for collaboration?
Despite the stark differences in tax policy approaches, there are areas where bipartisan collaboration is possible.
Expanding tax credits like the Child Tax Credit and Earned Income Tax Credit could provide common ground for both parties.
Addressing the expiring provisions of the TCJA might also lead to discussions on extending or modifying these cuts, particularly for middle-income earners.
Additionally, improving infrastructure investment through tax incentives could garner support from both sides of the aisle.
In the current Congress, there have been instances of bipartisan efforts, such as the introduction of the Tax Relief for American Families and Workers Act, which aims to provide tax relief to working families and stimulate economic activity.
Similar initiatives may continue in the 119th Congress, offering opportunities for collaboration on tax policy.
US Election and Tax: Harris v Trump – Conclusion
As the 2024 election looms, the future of US tax policy is a critical issue with wide-reaching implications.
The proposals from the presidential candidates and the leadership priorities of key congressional figures highlight a deep divide in approaches but also point to potential areas for bipartisan cooperation.
With key provisions of the TCJA set to expire and ongoing debates about economic fairness and growth, the election outcome will significantly shape the tax policy landscape for years to come.
Final thoughts
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