As the 2024 presidential election heats up, the potential tax implications of a Biden vs Trump rematch are coming into focus.
Let’s explore what a second term for each candidate could mean for your taxes.
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- Major tax law changes are coming after 2025 that could impact all American taxpayers.
- Trump is expected to push for making his 2017 tax cuts permanent, while Biden wants extensions only for those under $400K.
- The outcome of a potential 2024 Trump vs Biden rematch will have significant implications for individual tax bills.
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Trump vs Biden: How Their Tax Plans Could Impact Your Wallet
Biden’s Tax Vision: Cuts for Workers, Hikes for The Wealthy
President Biden has reiterated his commitment to reform the tax system to make it more equitable.
His proposal aims to provide tax relief to working families and increase taxes for high-income households and big corporations.
Chuck Marr from the Center on Budget and Policy Priorities has warned that a significant tax debate with trillions of dollars at stake is likely to occur after the election.
Biden’s plan includes extending the individual tax cuts from the Tax Cuts and Jobs Act for those earning less than $400,000 a year.
However, those whose income exceeds that threshold may see their tax rates increase to levels seen before 2017.
Trump’s Signature Tax Overhaul at Risk
During Trump’s presidency, his major legislative achievement was the Tax Cuts and Jobs Act of 2017.
This act lowered tax rates across the board.
However, it included a provision that would cause the individual tax cuts to expire after 2025.
If Congress does not take action, American households could face higher tax brackets, a reduced standard deduction, and child tax credits starting in 2026.
Howard Gleckman from the Urban-Brookings Tax Policy Center notes that whoever is inaugurated on January 20, 2025, will immediately need to address the expiring tax provisions.
No politician would want to see tax increases happen.
Although Trump has yet to release any detailed tax plans 2024, it is widely expected that if he is re-elected, he will push to make the 2017 individual tax cuts permanent.
A Costly Debate
Extending the individual Tax Cuts and Jobs Act provisions will not be easy from a budgetary perspective.
According to the Congressional Budget Office, extending them would result in a $2.5 trillion increase in deficits from 2024 to 2033.
President Biden plans to continue President Trump’s tax cuts for 98% of taxpayers.
The differences come down to what they would do with the rest of the tax code.
Given the differences in tax policies and the approaching expirations, the outcome of the 2024 election will have significant implications for Americans’ future tax bills, regardless of who wins.
This is a crucial fiscal debate that affects taxpayers of all income levels.
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