Sunrise or Sunset

In Summary

With less than a month until the 2024 general election, the tax proposals of Vice President Harris and former President Trump, as well as the looming sunset of many current tax laws, are especially important to many voters. As the outcome of the Presidential election remains uncertain, it is important to be aware of all tax proposals that could ultimately come to fruition and have a plan to act if and when they do. This Insight will highlight the major tax policies both candidates Trump and Harris are campaigning on. Further, the Insight reviews the federal legislative process in the United States these proposals must navigate before becoming law and impacting taxpayers, as well as the budget reconciliation process, acknowledging that this, as well as the make-up of Congress after the election will also end up having a substantial impact on if any tax proposal ultimately becomes law. 

Key Takeaways

• Trump’s proposals are largely centered around the Tax Cuts and Jobs Act of 2017 (TCJA). Without Congressional action before January 1, 2026, the majority of the TCJA’s provisions will revert to prior law. If elected, Trump has vowed to extend and make permanent the majority of the TCJA’s provisions. These include maintaining the highest individual tax rate at 37% instead of 39.6%, keeping the doubled estate and gift tax exemptions, and retaining the 20% deduction for qualified business income of passthrough entities. Additionally, Trump proposes to reduce the C Corporation Income Tax Rate and exempt certain income, such as tips, overtime pay, and social security, from taxation. 
• Harris plans to let many provisions of the TCJA sunset as scheduled, including allowing the highest individual tax rate to revert to 39.6% from 37% in 2026. Her campaign promises that no one earning less than $400,000 a year will pay more in taxes. Additionally, she proposes increasing the C Corporation Income Tax Rate, the long-term capital gains tax rate for certain taxpayers, enacting a minimum income tax on billionaires, and expanding deductions for small businesses. Similar to Trump’s plans, Harris also proposed exempting tips from taxation. 
• While both candidates have ambitious tax proposals, they must navigate the complex federal legislative process in the United States, which could hinder their plans. However, your Rockefeller Private Advisor will closely monitor these proposals and post-election negotiations, ensuring you are well-prepared to implement any necessary planning as tax laws evolve.