Breaking Down the 2024 Presidential Candidate’s Tax Agendas
As the 2024 presidential election approaches, tax policies are taking center stage, with Vice President Kamala Harris and former President Donald Trump presenting two distinct economic paths. Understanding their proposals will be key for businesses and individuals alike, as these plans could significantly affect corporate taxation and personal income taxes.
Our Tax team knows these issues matter to taxpayers, and we have put together a helpful table with both proposed basic tax plans for a side-by-side look.
Harris’s Tax Vision
Vice President Harris’s plan aims to raise revenue by increasing taxes on high-income earners and large corporations while easing the burden for middle- and lower-income families and small businesses. Her approach also targets closing tax loopholes, reinforcing efforts to support government funding, and reducing the national deficit.
Trump’s Approach
Former President Trump, on the other hand, advocates for extending the Tax Cuts and Jobs Act (TCJA), a policy that provided substantial cuts to individuals and businesses during his presidency. His goal is to preserve a low-tax environment, fostering investment and economic growth, though this could limit resources for public services.
See the chart below for a summary comparison of the tax plans for both candidates:
| Tax Category | Harris | Trump |
| Individual Tax | Increase Top Tax Rate: Elevate the highest tax bracket from 37% to 39.6%. | Permanence of TCJA Individual Provisions: Make the individual tax rates and deductions under the TCJA permanent. |
| Tip Tax Exemption: Exclude tips from being taxed. | Exemptions on Earnings: Exclude tips and overtime pay from taxation. | |
| Wealth Tax: Impose a 25% minimum tax on fortunes exceeding $100 million, inclusive of unrealized profits. | Tax Exemption for Social Security: No tax on Social Security benefits, as opposed to the current partial taxation policy. | |
| Capital Gains Tax | Capital Gains Tax Increase: Increase the capital gains tax rate for earnings over $1 million from 20% to 28%. | No changes |
| 1031 Exchange Limitation: Cap the deferral of property gains taxes via 1031 exchange at $500,000. | ||
| Estate Tax | Estate Tax Exemption Reduction: Lower the lifetime estate tax exemption to levels prior to the Tax Cuts and Jobs Act, roughly reducing it by half. | Estate Tax Provisions: Sustain the estate tax stipulations of the TCJA, including the $13.61 million exemption set for 2024. |
| Individual Tax Credits | Tax Credit Expansion: Extend the Earned Income Tax Credit and Child Tax Credits, offering $6,000 for children under 1, $3,600 for those aged 2-5, and $3,000 for older children. | Universal Child Tax Credit Increase: Raise the child tax credit to $5,000 per child universally. |
| Housing Affordability Tax Credit | Homebuyer Credit: Provide a $25,000 credit for first-time homebuyers. | No changes |
| Low-Income Housing Support: Strengthen credits for low-income housing. | ||
| Affordable Rental Incentives: Incentives for the construction of affordable rental properties. | ||
| Renewable Energy Incentives | Clean Energy Incentives: Broaden incentives for renewable energy. | No changes |
| Payroll Tax | Medicare Tax Increase: Raise the Medicare tax to 5% for earnings over $400,000. | Exclusion from Social Security Taxes: Exclude tips and overtime pay from being subject to Social Security taxes. |
| Corporate Income Tax | Corporate Tax Rate Hike: Increase the corporate tax rate from 21% to 28%. | Corporate Tax Rate Reduction: Lower the corporate tax rate to 20% or further to 15% for domestically produced goods. |
| Stock Repurchase Tax: Elevate the excise tax on stock buybacks from 1% to 4%. | ||
| Business Tax | Startup Deduction Growth: Increase the deduction for startup expenses from $5,000 to $50,000. | Permanent 20% Deduction for Qualified Business Income: Ensure the 20% deduction for Qualified Business Income remains permanent under the TCJA. |
| Energy Efficiency Promotion: Advocate for improvements in energy efficiency. | Permanent Excess Business Loss Limitation: Retain the permanent excess business loss limitation as per the TCJA. | |
| International Tax | GILTI and BEAT Rule Changes: Amend Global Intangible Low-Taxed Income (GILTI) rules, limit corporate inversions, adopt a rule for under-taxed profits, and repeal the Base Erosion and Anti-Abuse Tax (BEAT) tax rule. | U.S. Import Tariff Implementation: Establish a baseline tariff of 10% on all U.S. imports, with a potential increase to 60% for imports originating from China. |
Balancing Perspectives
Harris and Trump offer two diverging tax strategies: one focuses on generating government revenue through increased taxation of the wealthy, while the other seeks to maintain a business-friendly environment through lower taxes. Despite differences, both candidates share some common ground, such as offering relief to working-class individuals through policies like eliminating taxes on tips.
Stay Prepared and Get in Touch
Navigating the contrasting tax landscapes these candidates present will be crucial. Whether preparing for potential tax increases or leveraging opportunities from continued tax cuts, businesses and individuals must plan ahead to optimize their financial strategies.
At Grimbleby Coleman Advisors & Accountants, our Business Advisory services can advise you on these changes. From identifying tax credits to developing strategies that align with your financial goals, we’re ready to guide you through the complexities of any tax changes. Contact us to talk more.