The post-election period will focus on tax policy, as key parts of the tax law expire by the end of 2025.
Key parts of former President Trump's flagship 2017 tax cut, the Tax Cuts and Jobs Act, are set to expire in 2026, including lower personal income tax rates.
But President Trump and Vice President Harris have made bold proposals that extend beyond those deadlines, and the tax code could look very different in the coming years than it does today.
Here's a look at some of the two candidates' key tax proposals and what they mean for different taxpayers.
President Trump is fighting to protect the tax cut law
The 2017 tax cut was one of the Republicans' flagship bills during the Trump administration. Some Republicans want to fully extend the 2017 law.
These reductions reduced various personal income tax rates from 39.6 percent to 37 percent, 33 percent to 32 percent, 28 percent to 24 percent, 25 percent to 22 percent, and 15 percent to 12 percent.
The lowest tier was kept fixed at 10% and the wealthier tier at 35%. Wealthy people tend to receive a significant portion of their income in ways that are not legally designated as income, such as capital gains.
Critics accuse the law of reinforcing economic inequality that has sharply increased in recent decades. President Biden has said he wants the law to expire, but representatives for the Harris campaign remained silent on Biden's position. But Harris has taken a more right-leaning stance than the president on some tax-related issues, including setting capital gains tax rates lower than Biden's proposal.
The battle between Harris and Trump over corporate taxes
President Trump's 2017 tax law also includes major business tax changes and cutting the corporate tax rate in half, from 35% to 21%.
This has had the effect of increasing foreign investment in the United States and aligning international capital flows with domestic capital flows, according to a study by Harvard University, Princeton University, the Treasury Department, and the University of Chicago.
“The average tax rate change increases a company's domestic investment by 20% compared to the no-change baseline. New foreign incentives are significantly increasing foreign ownership in U.S. multinationals,” economists say. researchers including Gabriel Chodorow-Reich wrote in a paper earlier this year.
“These incentives also encourage domestic investment, demonstrating the complementarity of domestic and foreign capital,” it added.
President Trump has said he wants to lower the corporate tax rate to 15%.
Harris said that would be a move in the wrong direction. She wants to raise the corporate tax rate to 28 percent. He also proposes tax measures specific to small businesses, as opposed to broader moves to top corporate tax rates.
Harris said in august President Trump's cuts “overwhelmingly … went to the wealthiest Americans and big businesses, and caused the national deficit to explode.”
Fiscal-minded Democrats in the Senate have also warned that too many tax breaks for businesses could backfire and lead to monopolies and oligopolies.
“Will this tax law encourage billionaires to hoard their money, corporations to grow into giant monopolies, and multinationals to send jobs overseas?” Sen. Elizabeth Warren (D) , Massachusetts) asked about the 2025 tax reform at a Senate Banking Committee hearing in September.
Harris announces tax credits for homebuyers
Harris is pushing forward with tax proposals to help first-time homebuyers. This is a targeted tax measure for the U.S. real estate market, which is plagued by both a tightening interest rate cycle and a potential shortage of available real estate.
The plan also includes $25,000 in down payment assistance for first-time homeowners. Residential renters purchasing a home for the first time after paying two years' rent on time will be eligible for a down payment subsidy tax deduction.
The National Association of Home Builders estimates the U.S. housing shortage in 2022 to be 1.5 million units. The National Association of Realtors puts the number at 5.8 million units, while Freddie Mac puts the number at 3.8 million units. The estimates relate to slightly different time frames and involve different calculations.
Rent inflation tends to lag overall inflation, so as of September, rents were rising at an annual rate of 4.8%, outpacing the general consumer price index of 2.4%.
President Trump promises major tariff increases
President Trump plans to dramatically expand the U.S. tariff system, building on billions of dollars in new penalties imposed during his first term.
President Trump initially proposed a 10% general tariff and an additional 60% tariff on Chinese goods, but later expanded that to 20%.
Biden maintained some of Trump's tariffs and expanded them on some Chinese tech products, but experts say Trump's proposed tariff increases could reshape the U.S. economy. Pointed out.
“Biden’s China Tariffs” [were] It’s more geopolitical than economic,” Howard Gleckman, a senior fellow at the Tax Policy Center, told The Hill. “Obviously it was industrial policy.”
“President Trump has industrial policy on steroids,” he added.
Gleckman said it's nearly impossible to find mainstream economists who think tariffs are a good idea. “All the evidence is that tariffs only raise prices for American consumers and do not create jobs.”
Both candidates are making innovative arguments on taxes.
Trump and Harris both made one-time tax pledges during their campaigns, but Trump's numbers are likely higher than Harris's.
President Trump's proposals include making auto loans tax deductible, eliminating the state and local tax (SALT) deduction cap introduced as part of the 2017 tax law, canceling taxes on tips and overtime pay, and double taxation. We promise about. Americans living abroad.
Harris has proposed a $50,000 tax credit for people who want to start small businesses and an expansion of the capital gains tax.
Erika York, a senior economist at the Tax Foundation, described the Republican proposal as a “miscellaneous collection of random tax cuts” that are “very expensive.”
