On Tuesday, September 10th, many Americans tuned in to watch the live debate between Republican presidential candidate Donald Trump and Democratic presidential candidate Kamala Harris, moderated by ABC. The debate highlighted the candidates’ tax plans.
Harris has more of a progressive tax plan than Trump, planning on taxing higher income brackets and corporations to fund social programs. Two main proposals along those lines are raising the corporate income tax rate from 21% to 28%, and raising the capital gains tax from 20% to 28% for Americans who make more than $1 million annually. Additional proposals from Harris include:
Making tips exempt from income taxes.
Increasing the child tax credit to $3,600 for children aged 2-5, $3,000 for children 6-17 and to $6,000 for a child’s first year.
Providing $25,000 down payment assistance to qualifying first-time homebuyers.
Increase the $5,000 tax deduction for small business startup costs to $50,000.
Increase the Medicare tax from 3.8% to 5% for people making more than $400,000.
Trump, on the other hand, looks to lower the corporate income tax rate from 21% to 20% and to lower the corporate income tax rate to 15% for companies that make their products domestically. Trump’s additional proposals include:
Making tips and overtime exempt from income taxes.
Ending taxes on Social Security benefits.
Imposing a 10%-20% tariff on most imported goods and a 60% tariff on goods imported from China.
Additionally, Trump did say he’s in favor of the child tax credit, but did not indicate whether he would expand it.
Trump’s running mate, JD Vance, is in favor of expanding it to $5,000.
According to the Tax Foundation General Equilibrium Model, Kamala Harris’ tax plan is projected to increase 10-year revenue by $1,697 billion, decrease long-run GDP by 2.0%, and decrease long-run wages by 1.2%. On the other side, Trump's tax plan is projected to decrease 10-year revenue by $1,325 billion, decrease long-run GDP by 0.2%, and increase long-run wages by 0.6%.
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