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A Comparison of Trump & Biden’s Tax Proposals

by Chris Becze

With the presidential election only weeks away, many of our clients have asked us for a comparison of the candidates’ tax proposals. While we’ve reviewed them individually, we also wanted to provide a straightforward, side-by-side comparison of their proposed tax plans for both individuals and businesses.

Below is a chart outlining the differences between Joe Biden and Donald Trump’s proposed tax plans as of now:

Trump Biden
Individual Rates
  • Make Tax Cuts and Jobs Act (TCJA) rate cuts permanent
  • 10% middle class tax cut
  • Reduce 22% tax bracket to 15%
  • Raise top rate to 39.6%
  • Cap value of tax deductions at 28%
  • Impose 12.4% payroll tax on wages over $400,000
Corporate Rate
  • Retain 21% tax rate
  • Raise rate to 28%
  • 15% minimum tax on global book income over $100M
Capital Gains
  • Tax capital gains as ordinary income at top rate of 39.6% on income above $1M
Tax Cuts for Businesses
  • Make 100% bonus depreciation permanent
  • Make 20% pass-through deduction permanent
  • “Made in America” tax credits
  • Expand opportunity zones
  • New tax credits “for companies that bring back jobs for China”
  • 10% advanceable credit to reopen closed plants, retool facilities, and expand U.S. production
  • Incentive for manufacturing drugs and other critical products in U.S.
  • Expand new markets credits
  • Expand low-income housing credit
  • Tax credit for building onsite childcare facilities
  • Tax break for small businesses that start a retirement plan
Tax Increases for Businesses
  • Revise GILTI to 21% minimum tax
  • Impose tax penalty on corporations moving jobs offshore
  • Tax penalty on drug manufacturers increasing prices more than inflation
  • Tighten rules on classification of workers
  • Has endorsed financial transaction tax
  • Tighten opportunity zone rules
Tax Cuts for Individuals
  • Make TCJA individual provisions permanent
  • $5B in tax credits for contributions under the Education Freedom Scholarship program to help families pay for transportation, remedial programs, homeschooling materials, or private school tuition.
  • Universal savings accounts providing tax-free investment
  • Increase child and dependent care credit to $8,000
  • New refundable $15,000 tax credit for first-time homebuyers
  • Renter’s credit to reduce rent and utilities to 30% of income
  • Expand earned income tax credit for those over 65
Estate Tax
  • Make TCJA estate tax provisions permanent
  • Eliminate stepped-up basis for inherited capital assets
  • Restore estate tax rates to historic norms
Energy
  • Eliminate credits for electric vehicles
  • Repeal residential energy efficient property credit
  • Repeal renewable energy investment credit
  • Eliminate accelerated depreciation for renewable energy property
  • Restore full electric vehicle credit
  • Reform and extend tax incentives that generate energy efficiency and clean energy jobs
  • Reinstate tax credits for residential energy efficiency
  • Incentives for carbon capture technology
  • Incentives for manufacturing facilities making energy efficient upgrades

The above table was originally posted by John Schwartze, principal with Brown Smith Wallace, an independent firm associated with the Moore Global Limited Network. You can also download a PDF version here.


Moving Forward

Joe Biden’s proposed tax policy is aimed at adjusting provision within the TCJA. What this means specifically is a work in progress and will continue to be crafted after November 3, if he is elected.

Donald Trump will continue to promote the TCJA. If elected to a second term, he may try to extend the TCJA cuts permanently. He may also try to expand the TCJA and further reduce tax rates for individuals and businesses.

Regardless, we know that neither plan will move forward without congressional approval. If the executive and congressional branches are led by different parties, more political jockeying will be required to execute either candidate’s tax policy. Only time will tell, and we hope we’ll know which direction we’re headed on November 3.

More details regarding these tax plans may be revealed during interviews, ads and town halls in the coming weeks. If you have any questions in the interim — or post-election — do not hesitate to reach out to your local Armanino tax advisor.

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Chris Becze - Partner, Tax - San Jose, CA | Armanino
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