As the 2024 US Presidential Election approaches, the tax policies proposed by Kamala Harris and Donald Trump offer voters two distinct approaches to economic management and public finance.
Kamala Harris: Focus on Working Families and Corporate Taxation
Kamala Harris’s tax policy proposals emphasise support for working families and revisiting corporate tax rates. Key elements of her plan include:
Corporate Tax Rate Adjustment: Harris proposes increasing the corporate tax rate from 21% to 28%. This adjustment aims to increase federal revenue from corporations, partially reversing previous tax cuts.
Expansion of the Child Tax Credit: Harris supports expanding the Child Tax Credit, providing additional financial support to families with children.
Income Tax Exemption on Tips: Harris suggests eliminating federal income taxes on tips for individuals earning up to $75,000 from all sources, directly benefiting workers in service industries.
Earned Income Tax Credit (EITC) Expansion: Harris plans to increase the EITC by up to $1,500, aiming to provide more substantial support to low- and moderate-income workers.
Refundable Rental Tax Credit: Harris has expressed support for a refundable rental tax credit for those paying more than 30% of their income on rent. The credit would be scaled based on income, potentially offering relief in high-cost housing markets.
Speculation on a Carbon Tax: While not officially part of her platform, there is speculation that Harris might consider introducing a carbon tax as part of her environmental policy, although details remain unconfirmed.
Donald Trump: Emphasis on Tariffs, Tax Relief, and Business Incentives
Donald Trump’s tax policy proposals focus on trade protectionism, targeted tax relief, and incentives for businesses. His key proposals include:
Increased Import Tariffs: Trump proposes imposing a 10% to 20% tariff on all imports, with a 60% tariff on Chinese goods. These tariffs are intended to protect domestic industries, though they may also impact consumer prices.
Tax Deduction for Tip Income: Trump suggests allowing a 100% deduction on federal income taxes for earnings from tips, benefiting service industry workers by enabling them to retain more income.
Eliminating Taxes on Social Security Benefits: Trump has proposed ending taxes on Social Security benefits, though specific details on this policy are limited. The goal is to provide financial relief to retirees.
Lowering the Corporate Tax Rate: Trump proposes reducing the corporate tax rate from 21% to 20%. This change is intended to further stimulate business investment and economic growth by reducing the tax burden on corporations.
Increasing the Estate Tax Exclusion: Trump suggests increasing the estate tax exclusion, allowing individuals to pass on more wealth to heirs without incurring federal estate taxes. This policy is aimed at reducing the impact of estate taxes on wealthier families.
Larger Standard Deduction: Trump plans to increase the standard deduction for individual taxpayers, simplifying the tax filing process and potentially lowering overall tax liability for a broader range of taxpayers.
Conclusion: Differing Approaches to Tax Policy
The tax policies proposed by Kamala Harris and Donald Trump reflect different priorities and approaches to economic management. Harris’s policies focus on increasing support for working families and revisiting corporate tax rates, while Trump emphasises protectionist tariffs, business incentives, and targeted tax relief. As voters evaluate these proposals, they will consider how each candidate’s plan aligns with their economic preferences and needs.
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