Tax Comparisons

Tax Comparisons

With Election Day just around the corner, we wanted to help you sift through the rhetoric by providing you with a comparison of Trump and Biden’s tax proposals. Of course, it bears noting that these proposals often change once a candidate is elected, but here is where the candidates stand as of today.

Donald Trump Joe Biden
Individual tax cuts Permanency for the individual provisions under the Tax Cuts and Jobs Act. Increase the maximum child and dependent care credit from $2,100 to $8,000.
Create $5B in tax credits for contributions under the Education Freedom Scholarship program. Institute a refundable $15,000 tax credit for first-time homebuyers.
Implement tax-free investments into universal savings accounts. Implement a renter’s credit to reduce rent and utilities to 30% of income.
Expand the earned income tax credit for taxpayers over 65.
Business tax cuts

Permanency of 100 percent bonus depreciation.

10 percent credit for reopening plants and facilities and expanding production in the United States.
Permanency of 20 percent pass-through deduction. Incentive for businesses that manufacture drugs and other critical products.
Tax credits for companies that: 1) create jobs in America; and 2) bring jobs back to America. Small-business tax break for starting a retirement plan.
Credits for expanding new markets expanded.
Credit for low-income housing expanded.
Credit for businesses that build an onside childcare-facility.
Business tax increases None  21 percent minimum tax for global intangible low-taxed income.
Tax penalty for corporations who move jobs offshore.
Tax penalty for drug manufacturers who increase prices beyond inflation.
Individual tax rate Permanency for the Tax Cuts and Jobs Act rate cuts. Raise the top tax rate from 37 percent to 39.6 percent.
Cut taxes by 10 percent for the middle class. Place a threshold on the value of tax deductions at 28 percent.
Reduce the 22 percent tax bracket to 15 percent. On wages over $400,000, implement a 12.4% payroll tax.
Corporate tax rate No change. Keep 21 percent tax rate. Raise the corporate tax rate to 28 percent.
Institute a 15 percent minimum tax on global book income over 100 million.
Estate tax Permanency for Tax Cuts and Jobs Act estate-tax provisions. Restore estate tax rates to pre-TCJA norms.

 

Eliminate stepped-up basis for inherited capital assets.
Capital gains No changes. Taxed as ordinary income at top rate (which Biden would increase from 37 percent to 39.6 percent) on income above $1 million.
Energy Eliminate: 1) credits for electric vehicles and 2) accelerated depreciation for renewable energy property. Instate full credit for electric vehicles.
Repeal: 1) the residential energy efficient property credit; and 2) the renewable energy investment credit. Extend tax incentives for companies that create jobs in energy efficiency and clean energy.

Reinstate tax credits for residential energy efficiency.

 

Create incentives for: 1) carbon capture technology; and 2) manufacturing companies that make energy efficient upgrades.