Both Kamala Harris and Donald Trump made sure to talk about taxes in the final days before the presidential election. That’s no coincidence: More than 144 million taxpayers filed personal income tax returns this year, a topic likely on the minds of countless voters.
While Congress controls the purse strings, candidates’ policy priorities drive the legislative agenda, so it’s a good idea to come into Tuesday’s 2024 general election well-informed.
Here’s what former President Trump, the Republican nominee, and current Vice President Harris, the Democratic nominee, had to say about major tax issues.
Trump: Extend TCJA
On his website, Trump writes that he plans to pass a “big tax cut for workers.” The 2024 GOP platform expands on this issue a bit, saying Republican lawmakers promise to “make permanent provisions of the Trump Tax Cuts and Jobs Act that doubled the standard deduction, expanded the child tax credit, and spurred economic growth for all Americans.” “
Indeed, much of Trump’s presidential legacy stems from the Tax Cuts and Jobs Act of 2017 (TCJA), which made sweeping changes to the way people and businesses are taxed. The TCJA reduced the average person’s taxes by about $1,600, although households with incomes between $308,000 and $733,000 benefited the most.
This has become a talking point for Trump as many provisions of the tax law expire at the end of next year. And while most people like the idea of tax cuts, extending the TCJA would be costly: Trump’s plan would add $7.5 trillion to the national debt through 2035, according to one analysis.
Harris: Tax high income people more
Like President Joe Biden, Harris has pledged not to raise taxes on those making less than $400,000 a year. But she supports ensuring that “the wealthiest Americans and the largest corporations pay their fair share,” according to her book on economic opportunity policies.
She plans to repeal Trump’s tax cuts aimed at wealthy Americans, impose a minimum income tax on the super-rich and increase the tax on net investment income. Harris also proposed raising the tax on long-term capital gains—profits from the sale of assets you’ve held for at least a year—to 28% for people who earn more than $1 million a year. (Senator Bernie Sanders, D-Vermont, told NBC he doesn’t think it goes far enough.)
Critics say her proposals would be a headache for the IRS, although they could mark significant progress toward her stated goals: An analysis from the Institute on Taxation and Economic Policy found that Harris’ tax ideas would raise taxes by 4.1% on the richest 1% of Americans while cutting taxes by an average of 2.7% of Americans in the middle income quintile.
Trump: No Tax on Social Security Benefits
In September, Trump posted a video on his Truth Social account criticizing Social Security’s “cruel double taxation,” implying that people shouldn’t have to pay income taxes on Social Security benefits after having to deal with payroll taxes entirely ( work) lives.
“I promise not to pay taxes on Social Security benefits,” Trump said in the video.
The Social Security benefit tax was introduced in 1984 and is currently capped at 85%, meaning you only pay taxes on benefits up to that level. Only beneficiaries whose income exceeds a certain threshold must pay it.
This position is likely important for millions of older Americans who live on fixed incomes and are struggling with rising costs of living. But the impact will be relatively limited. Morningstar analysts found that 45% of American workers will not be able to cover all their expenses in retirement; if the policy were to change as Trump suggests, that number would drop to 41%. That’s on top of concerns that Trump’s plan to eliminate Social Security taxes would cause the program to run out of money sooner.
Harris: Expand child tax credit
Harris’ policy document proposes restoring the expanded child tax credit, which has proven to be a lifeline for many families stressed by making ends meet during the pandemic. She’s calling for the expansion to be permanently restored by increasing the tax credit, which currently stands at $2,000, to $3,600 per child. (Trump ally Sen. J.D. Vance of Ohio said he “would like to see a child tax credit of $5,000 per child.”)
Harris also proposed a $6,000 tax cut for middle- and low-income families in their child’s first year of life.
“This is a vital year of critical child development,” she said at the August event. “And costs can really add up, especially for new parents who need to buy diapers, clothes, a car seat and more.”
Harris’ child tax credit proposal would cost about $1.6 trillion over the next 10 years, according to the nonpartisan Tax Foundation. Another analysis found that her overall tax plan, which also includes an expansion of the Earned Income Tax Credit, would increase the debt by $3.95 trillion through 2035.
Trump: increase tariffs
“Our merchandise trade deficit has grown to more than $1 trillion annually,” the GOP platform says. “Republicans will support base tariffs on foreign-made goods, pass the Trump Reciprocal Trade Act, and address unfair trade practices. As tariffs on foreign producers increase, taxes on American workers, families and businesses could fall.”
The need for tariffs—or a tax imposed by the government on imported goods—was a cornerstone of Trump’s 2024 platform. The nonpartisan Council on Foreign Relations says tariffs could “provide a modest source of government revenue,” and Trump has repeatedly said other countries would pay for them. He proposed imposing a tariff of up to 20% on imported goods from most countries and a 60% tariff on goods from China.
But the effects of Trump’s tariffs may be felt closer to home. Washington Post On Thursday, it was reported that executives from companies such as AutoZone and Columbia Sportswear admitted that they plan to raise prices for consumers. And an August analysis from the Peterson Institute for International Economics found that, depending on how the policies are implemented, Trump’s tariffs could cost middle-class American households $2,600 a year.
However, his other proposals could soften the bill’s sting. Trump also proposed eliminating taxes on auto loan payments and restoring the state and local tax (SALT) deduction.
Harris: Help home buyers
Harris’ policy document outlines her hopes to address the housing affordability crisis with a slew of tax breaks, including one that supports “new construction or rehabilitation of more than 400,000 owner-occupied homes in low-income communities” and one that rewards people who are building the first houses. homes, as well as one that would provide first-time homebuyers with down payment assistance of up to $25,000.
The goal is to “provide significant tax breaks to builders who build homes sold to working families and significantly change the economics of building homes affordable for young families.”
However, details about the actual implementation of these proposals are scarce. Case in point: One expert told CNBC he’s concerned about the difficulty of identifying entry-level homes, while another told Realtor.com that rising demand for homes could drive up prices.
Harris and Trump: Stop Giving Tax Advice
Both Trump and Harris have said they would eliminate tip taxes. While this may seem great—4 million Americans work side hustles, according to Yale University’s Budget Lab—the potential impact is questionable.
Many of the low-income workers covered by this proposal already don’t pay much (or anything) in income taxes because they earn too little.
There could be other consequences: Employers could cut employees’ base pay, according to a paper published in September by the Brookings Institution, and Americans who traditionally don’t receive tips could start asking for them to get around the rules. . Finally, PBS reports that consumers may begin to tip less, and broader conversations about issues such as raising the minimum wage may fade into the background.
More money:
Harris vs. Trump on inflation: how each candidate plans to lower prices
Harris vs. Trump on Retirement: How They Stack Up on Social Security, Medicare and More
Harris vs. Trump on Housing: Each Candidate’s Plan to Lower Costs for Home Buyers and Renters