So far, Harris has said she wants to:
Democrats have been agitating for some of the above changes for years. Biden, for instance, proposed raising the capital gains tax — basically, a tax on profit made by selling something, that increases in value over time, like stocks or gold — to 39.6 percent. The current rate is 20 percent, meaning Harris’s proposed rate would be an eight percentage point increase. Harris’s proposal comes with some limitations: It would exempt income from stock dividend payouts and would only apply to taxpayers with $1 million or more in income per year.
Harris’s proposed corporate tax rate — the amount corporate entities have to pay on their income — would be a 7 percentage point increase from the current federal rate of 21 percent. That’s in line with Biden’s 2025 budget proposal, as is her proposal for a so-called “billionaire tax” that would impose a 25 percent yearly tax on unrealized gains, or the increase in value of unsold assets like stocks, for people with $100 million or more in assets. New small businesses can currently claim a $5,000 deduction on their taxes, and Harris proposes giving them up to 10 times that.
The idea here, Harris has said, is to ensure “big corporations pay their fair share.” But she has also won plaudits for the plan from key Democratic donors: Mark Cuban, the billionaire investor, praised Harris for “going center 100 percent” after she announced the capital gains tax rate. Her proposals focused on middle-class and low-income Americans reflect a similar, somewhat moderate populism.
Her subsidy for first-time homebuyers is intended to put homeownership in reach of more people, and she has pledged to revive a popular pandemic-era expansion of the child tax credit. Harris’s plan would give parents of newborn children a $6,000 tax credit, those with children between 2 and 5 up to $3,600 in tax credits, and families with kids ages six to 17 up to $3,000. Like Trump, Harris has promised to get rid of taxes on tips, though in a more limited fashion than her competitor: The vice president’s plan would strike federal income taxes on tips, but Medicare and Social Security taxes would still be taken out of tipped wages.
Finally, Harris would keep individual income tax rates where they are except for Americans making more than $400,000 a year. Americans currently in the top tax bracket would see their income taxes returned to the 39.6 percent they were before Trump’s 2017 tax cuts (up from 37 percent today), and would also be required to pay more Medicare taxes.
Ostensibly, higher capital gains and corporate taxes would help make up for the revenue lost to Harris’s planned tax breaks. The proposed child tax credit increase would cost $1.2 trillion over 10 years, and her housing credit plan would cost an estimated $100 billion; all told, according to the Committee for a Responsible Budget, Harris’s proposal would increase the federal deficit by $1.7 trillion over the next decade.
Trump’s plans are geared toward corporations and the ultra-wealthy
Trump’s tax message has been less about finding balance and more about maximalism: lower taxes for businesses, using taxes to promote his “America First” ideology, and going further with populist promises than Democrats.
So far, Trump says he plans to:
- Slash some corporate taxes to 15 percent
- Institute a tariff of up to 20 percent on all imports (except those from China, which would have a 60 percent tariff)
- Renew the individual tax cuts from 2017, keeping even the highest income tax brackets where they are
- Get rid of taxes on Social Security benefits
- End taxes on tips
-
In his first term, Trump oversaw a significant change to the US tax code that, among other things, lowered the corporate tax rate to 21 percent. Now, he says that rate should be even lower — just 15 percent — for firms planning to manufacture in the United States.
Trump also plans to revisit and expand another idea from his first term: tariffs. Trump’s 2018 tariffs on Chinese imports backfired, jumpstarting a trade war with China. This time around, he says he’d like to see tariffs of up to 60 percent on goods imported from China, as well as a tariff of up to 20 percent on all other imported goods. (Trump has also reportedly contemplated getting rid of income taxes completely and raising tariffs enough to offset the losses such a policy would generate.)
Trump has made protecting US industry central to his campaign, but some economists believe his tariff policy could ultimately hurt American consumers.
“We should just call them taxes on imports because that’s what they are,” Dean Baker, a senior economist at the Center for Economic Policy Research, told Vox. “We import $4 trillion of goods every year. So that’s a $400 billion tax increase. That’s really quite a hit that’s overwhelmingly going to moderate-income, middle-class people,” as the ultra-wealthy are more likely to spend their money abroad and on things other than consumer goods.
On the individual front, Trump promised to extend his 2017 individual tax cuts. Again, Harris wants to extend these for everyone except top earners; Trump would extend them for all Americans, regardless of income. (As those cuts will all expire by the end of 2025, Congress will have to figure out what to do about these tax cuts no matter who wins.)
Trump has also proposed eliminating taxes on Social Security benefits for senior citizens — which could save a person about $560 per year. But doing so could cost up to $1.8 trillion and further imperil the Social Security fund, which is set to run out in 2035.
Unlike Harris, Trump hasn’t specified how his policy eliminating taxes on tips would work. Assuming that tips would be exempt from all taxes, however, his plan could cost up to $250 billion through 2035.
Vice presidential candidate JD Vance floated a child tax credit increase of $5,000 per child in a CBS interview, but Trump has yet to endorse that position.
Like Harris, it’s not immediately clear how Trump would pay for these changes, which could cost up to $7 trillion over 10 years. He has floated creating a commission, perhaps led by his billionaire ally Elon Musk, to cut waste, and proposed the creation of a sovereign wealth fund — essentially, an investment fund on a national level — similar to those in Saudi Arabia and China that would, according to Trump, finance “great national endeavors,” pay down the national debt, and fund infrastructure projects — something that would ordinarily be done with tax revenue and congressional appropriations.
