News & Trending Shopping & Deals News

4 Tax Issues You Must Understand Before Voting

female journalist asking politician questions
Updated Sept. 24, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Millions of Americans are expecting action when it comes to their taxes from whoever secures the White House in November. That’s why Donald Trump and Kamala Harris have been talking about that issue and others related to the economy on the campaign trail.

While their ideas may have similarities, it’s clear that the candidates have quite different ideas on how to steer the future of the American economy. You may want to understand their policies to prepare yourself financially.

Here’s a look at some things you should know about both candidates when it comes to taxes and where they stand on tax cuts and increases.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

Tax Cuts and Jobs Act of 2017

Vitalii Vodolazskyi/Adobe Tax Cuts and Jobs Act on flag

It’s important to note that the next president faces trillions of dollars in expiring tax breaks. Those were enacted by Trump through the Tax Cuts and Jobs Act (TCJA) of 2017. Per the Tax Foundation, more than 60% of taxpayers could see higher taxes in 2026 if there’s no extension.

As voters wait on both presidential candidates to unveil more details on their economic agendas, Trump and Harris are calling for tax changes that could impact millions of people in the United States. Both have proposed tax cuts and increases that would require congressional approval.

Trump on tax cuts

Microgen/Adobe reporters Interviewing politician on press conference

It may be no surprise that Trump plans to preserve at least some of the individual and business tax cuts put in place via his TCJA. According to the Trump campaign, those tax cuts benefited millions of Americans and can help the millions of people who are dealing with the impacts of inflation and higher prices.

The campaign said the individual tax cuts and business tax reforms would help spur economic growth and confront higher costs of living without inflationary government spending.

Harris on tax cuts

wellphoto/Adobe female politician speaking at international political event

Though Harris herself may not have directly addressed TCJA extensions so far on the campaign trail, there has been some Democratic support. In fact, President Joe Biden’s top economic advisor voiced support for partial extensions. According to the Tax Foundation, Harris has a record of favoring steeper tax hikes on businesses and people than President Biden.

Harris on tax increases

David/Adobe colleagues analyzing finance report together

Trump and Harris have both said they will address the budget deficit. They have both proposed plans to raise revenue. Again, keep in mind tax law changes require approval by Congress.

According to the Harris campaign, she will push to increase the corporate tax rate to 28%, up from the 21% put in place through the TCJA. That could potentially reduce the deficit by $1.3 trillion over a decade, according to the Treasury Department.

She also proposes to raise taxes on high-income people, raising the top marginal income rate to 39.6% from 37%. She also proposes taxing investment gains of $1 million or more at the ordinary income rate instead of the lower capital gains rate.

Trump on tax increases

thanapun/Adobe china us shipping containers import export concept

In a pitch that seems to find great support from his base, Trump has called for sweeping tariffs, which are taxes levied on imported goods. Further, the former president suggested he’s looking at putting in place a policy of tariffs that would lead to the elimination of the federal income tax.

While voters may favor the idea of that elimination, they could be forced to pay more for goods and services with companies being forced to pay tariffs. Experts say the tariffs put in place during his administration contributed to higher costs for consumers and a loss of jobs.

Trump on tip taxes

MargJohnsonVA/Adobe bill tab at cafe with cash money

The Trump and Harris campaigns have both talked about the idea of eliminating income tax on tip income. Trump made the proposal well before Harris. In fact, his pitch drew a mixed reaction.

The former president has also called for no taxes on Social Security income. Social Security has been a hot issue this election season amid fears of the finances for the program and related ones.

Harris on tip taxes

JJ Gouin/Adobe Tip jar in restaurant dining room

In a more recent move, Harris also talked about the idea of eliminating taxes on tip income. She said it’s part of her commitment to fight for working families, which she said also includes a plan to raise the minimum wage.

As you might expect, with both candidates standing behind the idea of cutting taxes on tip income, it has some bipartisan support in Congress.

Child Tax Credit expansion

JJ Gouin/Adobe Child tax credit form

With both candidates talking about their plans to help working American families, it may be no surprise that the campaigns have discussed expanding the Child Tax Credit. In fact, Harris announced an economic plan that includes an expanded Child Tax Credit worth up to $6,000 in total tax relief for families with newborns.

After Sen. JD Vance of Ohio, Trump’s GOP running mate, talked about a $5,000 Child Tax Credit, the campaign said the former president would consider a significant expansion of the Child Tax Credit for American families.

Bottom line

pressmaster/Adobe young politicians listening to political leader

As the November general election approaches, both presidential candidates have been talking about the economy and their plans for taxes if they win. While Trump and Harris may both favor tax cuts on tip income, they have very different tax and economic agendas.

How their plans may affect your ability to get ahead financially is still largely unknown. Perhaps in the upcoming debate, the candidates may reveal more of their economic agendas and how their plans for taxes could impact you.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details


Author Details

Chris Adam

Chris Adam is a seasoned personal finance, technology, and general assignment journalist. As a broadcast and digital journalist, he's served as a leader in network and local newsrooms. Some of his favorite topics to write about include investing, shopping, retail, and stocks.