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With the presidential election about two weeks away, we wanted to highlight President Trump and Democratic presidential candidate Joe Biden’s tax plans. The election results could drastically change the tax rates for both individuals and businesses in the country.
President Trump has not really talked a lot about taxes in his campaign speeches and debates, choosing instead to focus on the economy and policies surrounding Covid-19. When he was campaigning during the 2016 election, he touted lowering the corporate tax rate and simplifying the tax code. After elected president, he worked with Republicans in Congress to pass the 2017 Tax Cuts and Jobs Act (TCJA), which implemented the following changes to the tax code:
President Trump continues to advocate long-term capital gains taxed at a maximum tax rate of 20% . Due to the passage of the TCJA, President Trump does not have many new tax proposals in his re-election campaign. Since most of the provisions in the TCJA expire in 2025, if re-elected, he would most likely try to make permanent the changes he implemented with the TCJA.
Former Vice President Biden, on the other hand, has very different tax plans. If elected, he would like to implement the following changes:
In addition to the above tax plans, each candidate has stated his plans for the Affordable Care Act (ACA) put in place by former President Barack Obama in 2010 to extend health insurance coverage to millions of uninsured Americans. President Trump wants to repeal this law, while Joe Biden wants to expand it.
Based on the above, President Trump and Democratic presidential candidate Joe Biden have major differences when it comes to taxation. Hopefully, we will find out soon which direction our taxes will be going. If you have any questions about how a new president will affect your tax situation, please reach out to your Schneider Downs tax advisor.
1 Prior to the TCJA, a limitation on itemized deductions took effect at higher income levels. In 2017, it was $318,700 for married filing joint returns and $261,500 for single filers.
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