Against the rich and for everything American: how Biden and Trump want to change taxes in the USA
Less than two weeks left until the US presidential election, today, October 22, final debate of candidates will take place... But Americans are choosing not just a face that will often appear on television over the next four years, they are choosing a political course that can significantly affect the life of everyone in the country and even beyond.
To help our readers understand what awaits US residents after the victory of each of the candidates, ForumDaily analyzed their change programs in key areas. and highlighted the main thing. We have already talked about Trump and Biden's Immigration Plans... Today we'll talk about taxes.
In short, Trump plans to further reduce taxes in the second term, and Biden, if he wins, intends to raise them, but only for the rich.
Trump: 2.0 cut and no China
President Trump's tax proposals are referenced in two sections its programs: "Jobs" and "Ending Dependence on China." The tax policy did not receive a separate item in the program.
Much has been given so far without explanation. For example, Trump promises to cut taxes to increase the amount of salaries that Americans receive in their hands. However, no figures are given in the plan.
In addition, in case of re-election, the head of state promises a "Made in America" tax credit. It is easy to assume that we are talking about encouraging companies to establish production in the United States, creating new jobs, but there is no specifics about this loan either.
Among other things, Trump is proposing to expand the so-called zones of opportunity, a program created as part of his 2017 tax reform. It aims to stimulate investment in economically disadvantaged areas. It does this by providing capital gains tax incentives to individuals and businesses investing in participating Zones of Opportunity.
Trump's plan lays out two strategic proposals for companies moving manufacturing from China to the United States. The first is the tax credit mentioned above, for which there are no details. Second, it is proposed that a 100 percent tax deduction be allowed for asset transfer costs to certain industries (pharmaceuticals and robotics) that return manufacturing to the United States. The proposal does not specify what types of assets qualify for the 100% deduction, whether it will become permanent, or how the company will be determined to “return production”.
President Trump and his advisers have also mentioned a number of other tax measures that are not listed in the program for a second term. The head of the White House called for a payroll tax cut. In addition, he mentioned the idea of reducing the capital gains tax rate from 20 percent to 15 percent (it is not clear if this idea includes a net investment income tax (NIIT) of 3,8 percent).
In addition, Trump called for "tax cuts for the middle class" in the form of rate cuts, but without details. The lack of details makes it difficult to assess how the implementation of Trump's ideas will affect taxpayers.
Biden: select and divide
Democratic presidential candidate Joe Biden has put forward several proposals to change tax laws.
In general, he offers raise taxes on corporations and wealthy Americans, while canceling some clauses of Trump's 2017 tax reform.
Biden promises not to raise taxes for those earning less than $ 400 a year. According to his headquarters, this is more than 90% of taxpayers. But it all depends on how you evaluate. If we consider only direct taxes, then everything is correct: 90% of US taxpayers earn less than $ 400 a year.
But the situation is slightly different when it comes to indirect taxes, such as the corporate tax increase that Biden is proposing. Economists believe workers end up feeling the rise in their wallets. According to Biden's plan, workers will not pay a higher income tax rate, but their salaries after taxes by the corporation may be lower.
If Biden wins the election and manages to make his agenda a reality, then most of the tax burden will be borne by high-income individuals. Analysis Penn wharton budget model shows that those who earn less than $ 400 a year will see an average 000% decrease in after-tax income, and those who earn more than this amount will receive 0,9% less in their hands than before the innovations Biden.
The former vice president also proposes to increase the tax credit for children and restore credit for first-time home buyers.
On the subject: 5 facts that make this US presidential election unique
Biden's plan calls for an increase in the maximum federal income tax rate from 37% to 39,6% for those with taxable income in excess of $ 400. He also wants to tax wages in excess of $ 000 on Social Security. Now people who earn more than 400 a year do not pay it. Estimated Tax foundationthis can be a real problem for the wealthy living in states with high local taxes (California, New Jersey, New York). Their combined tax burden (state and federal taxes) can exceed 60%.
The famous rapper 50 cent is outraged by Biden's idea and announced that he will leave the United States if he wins. The artist is not ready to give 62% of his income to the government.
Estimated Urban Brookings Tax Policy Center, such innovations will lead to the fact that the 1% of US residents with the highest income, the amount on hand after taxes will be reduced by an average of 15,9%.
According to Biden's plan, the corporate tax rate will rise from 21% to 28%. It will also set a minimum tax on "book" corporate profits of 15% and increase the tax on international profits. According to the analysis by Tax foundationThe proposed business taxes will bring the US budget $ 2,4 trillion to $ 4 trillion over 10 years.
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