Former President Donald Trump and Vice President Kamala Harris are both unveiling new tax plans as the election draws nearer. Trump’s proposals include ending double taxation on Americans living abroad and making interest on car loans tax deductible. Harris, on the other hand, has proposed expanding the child tax credit, providing tax credits for first-time home buyers and increasing taxes on corporations and top earners.
Harris’ tax plans are designed to benefit middle- and lower-income Americans, with proposals like expanding the Earned Income Tax Credit, providing tax credits for families with newborns, and increasing health care subsidies. Trump, on the other hand, has proposed eliminating income taxes on overtime wages and Social Security payments. However, economists are warning that eliminating income taxes on Social Security could lead to the program becoming insolvent.
Harris’ tax plan takes aim at the wealthiest Americans, proposing a 25% capital gains tax on those with a net worth of $100 million or more. Trump, on the other hand, is more likely to benefit high-income earners, with plans to extend provisions in the 2017 tax law that benefit the rich. His proposal to eliminate the $10,000 cap on the state and local tax deduction would primarily benefit the top 0.1% of taxpayers.
In terms of business and corporations, Harris has proposed raising the corporate tax rate from 21% to 28% and raising the alternative minimum tax for corporations earning more than $1 billion. Trump, on the other hand, has promised to lower the corporate tax rate to 15% for companies that manufacture their products in the U.S. and has proposed imposing tariffs on imported goods.
Harris intends to pay for her tax plans through tax increases on the wealthy, while Trump has claimed he will use tariffs on imported goods to cover the cost of his proposals. However, experts warn that using tariffs to replace income taxes could disproportionately hurt lower-income Americans. The Committee for a Responsible Federal Budget estimated that both candidates’ plans would increase the federal deficit, with Harris’ agenda adding approximately $3.5 trillion and Trump’s plan adding approximately $7.5 trillion.
Both candidates’ tax proposals could face obstacles in Congress if they are elected. Republicans may be reluctant to support tax cuts on their wealthy supporters and corporations, while Democratic lawmakers may try to obstruct Trump’s tax plans. Billionaire Michael Bloomberg criticized both candidates’ tax proposals, claiming that they do not address the need for more broad-based tax increases to bring the national debt under control and invest in government programs.
