President Donald Trump and Vice President Kamala Harris have both unveiled new tax plans in recent days as they campaign ahead of the election. Trump has proposed ending double taxation for Americans living abroad and making interest on car loans tax deductible. He has also suggested not taxing income from tips or overtime and eliminating income tax on Social Security benefits. Harris, on the other hand, has put forth a suite of tax proposals aimed at helping middle and lower-income Americans, such as expanding the child tax credit, providing tax credits for first-time home buyers, and increasing taxes on corporations and top earners.
Harris has outlined an “opportunity economy” plan that focuses on bolstering the middle class, with proposals like expanding the Earned Income Tax Credit, offering tax credits for families with newborns, and providing health care subsidies under the Affordable Care Act. The Tax Policy Center estimates that 70% of households making $113,000 or less would benefit from Harris’ proposals. Both Harris and Trump have proposed no tax on tipped income, although Harris’ plan includes income limits and guardrails to prevent abuse. Trump has also called for eliminating income taxes on overtime wages and Social Security payments, which could benefit high-income earners more.
Harris’ tax plan targets the wealthiest Americans, proposing a 25% capital gains tax on individuals with a net worth of $100 million or more, and a 33% rate for those earning over $1 million. Trump, on the other hand, aims to benefit high-income earners by extending provisions of the 2017 tax law that disproportionately impact the rich. He also wants to eliminate the cap on state and local tax deductions, which primarily benefits the top 0.1% of taxpayers. Harris plans to raise the corporate tax rate and alternative minimum tax for certain corporations, while Trump plans to lower the corporate tax rate for companies manufacturing in the U.S.
Both candidates’ tax plans are projected to increase the federal deficit, with Harris’ plan estimated to add $3.5 trillion and Trump’s plan adding $7.5 trillion. Trump has suggested using tariffs on imported goods to cover the costs of his proposals, but experts warn this could disproportionately impact lower-income Americans. Project 2025, associated with Trump’s campaign, proposes a total overhaul of the executive branch and changes to tax rates, but it has faced criticism for favoring wealthier Americans. The ultimate outcome of these tax proposals will depend on who wins the election and their ability to pass legislation through Congress.
