Presidential Tax Plans, What Changes Are Ahead?
Presidential Tax Plans 2024

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It’s an election year. This means current tax policy will likely change depending on who becomes our next President.

Technically, the final candidates have yet to be decided. It seems clear, however, that the race will end up between incumbent Democrat President Joe Biden and Republican challenger former President Donald Trump.

Regardless of which candidate ultimately claims the office, we may be in for marked changes in tax policy. It all depends, and only time will tell.

But we’ve heard some indications about tax policy directions from both camps. And here’s a preview of how taxation structures might evolve following the 2024 Presidential election.

President Biden’s Potential Tax Plans

In a speech last week, Joe Biden pledged to allow former President Donald Trump’s Tax Cuts & Jobs Act (TCJA) tax program to expire after he’s reflected (many of the legislation’s provisions expire next year).

Trump’s TCJA has been hotly debated, with passionate support for and against the program. Those opposed point to the TCJA slashing corporate tax rates, dropping the rate from 35 percent to 21 percent. This tax break has seen corporate profits rise but has failed to generate a “trickle-down” in the form of increased wages, legislators claimed. And in the background, the national debt has soared to unfathomable heights.

Trump’s Tax Cuts and Jobs Act also temporarily lowered personal income tax rates through 2025, which opponents see as a “giveaway to the rich.”

In his recent speech, Biden noted: “[Trump] was proud, very proud of his $2 trillion tax cut when he was president that overwhelmingly benefited the wealthy and the biggest corporations and exploded, exploded the federal debt.”

Meanwhile, those in favor of continuing Trump’s Tax Cuts and Jobs Act call out the increased standard deduction — which rose from $6,500 to $12,000 for individual filers, from $13,000 to $24,000 for joint returns, and from $9,550 to $18,000 for heads of household — as a significant benefit to those in middle and lower income tax brackets.

The positive impact is backed up by tax data indicating filers who earned $50,000 to $100,000 received a tax break of about 15 percent to 17 percent, and those earning $100,000 to $500,000 in adjusted gross income saw their personal income taxes cut by around 11 percent to 13 percent. While those earning over $1 million annually saw a 6% tax break. All of which amounts to taxpayers earning less than $100,000 annually seeing a tax break twice that of $1 million+ earners.

Former President Trump’s Potential Tax Plan

At a recent fundraising event, former President Donald Trump stated that one of his core issues in the second term would be extending 2017’s Tax Cuts and Jobs Act tax breaks.

If TCJA provisions are extended, those making between $400,000 and $1 million would see a tax break of around $15,000, increasing their annual income by 3.1%. And those earning $1 million or above annually would realize a tax break of about $50,000, increasing their annual income by 2.3%.

Trump’s opponents note that only about a quarter of the lowest-income households would see any tax breaks. Their average tax cut would be $100, which would increase their annual incomes by a minimal 0.5%.

Have Questions About Changing Tax Policies?

For the moment, any potential changes in tax policy are entirely theoretical. But one way or the other, the upcoming election will have some impact on tax policy over the next four years.

If you have questions about how this may impact your personal or business finances, get in touch for a FREE Consultation!

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