2024 Presidential Election Impact on the National Tax Landscape

The 2024 presidential election is heading into its final stretch, and the candidates are providing more details about their campaign positions, including their thoughts on tax policies.

Expirations, Expansions, and Rollbacks

Of high concern for taxpayers are the plethora of tax provisions in 2017’s Tax Cuts and Jobs Act (TCJA) expiring in 2026. Because of these looming expirations, it is anticipated that new tax legislation will be put in place by the end of 2025, so the outcome of this election will likely have a meaningful impact on future tax policy.

The Trump campaign’s primary tax proposal is to make many of the expiring TCJA provisions permanent. This includes keeping the highest marginal tax rate for individuals at 37%, maintaining higher percentages of bonus depreciation, keeping the 20% pass-through business income deduction, and maintaining the child tax credit at its current levels. The Trump campaign has also proposed eliminating income and payroll taxes on tips and Social Security payments. The Trump campaign’s main economic proposal this election has been focused on Trump’s tariff proposal. Currently there is no tariff rate officially endorsed by the Trump campaign; the former president has proposed raising tariffs to 10% on all goods, and 60% on goods imported from China – an increase from 1% and 11%, respectively.

The Harris campaign is standing on the “tax cuts for middle-class families” platform. Her main talking point has been the increase and expansion of the Child Tax Credit and Earned Income Tax Credits. The details of her Child Tax Credit and Earned Income Tax Credit plans can be found in the chart below. In addition to those credits, the Harris campaign has listed plans that include a rollback of the TCJA tax cuts for wealthier Americans, enacting a billionaire minimum tax, and the quadrupling of the tax on stock buybacks. Though the specifics of these plans are not specified, Harris’s platform claims that she will increase the long-term capital gains for those earning a million dollars or more to 28%. She also has been campaigning to eliminate taxes on tipped wages. The Harris campaign is also planning to expand the startup tax deduction for new businesses from $5,000 to $50,000.

Corporate Tax Rate

One of the main differences between the Harris and Trump platforms is the treatment of corporate tax. The Trump campaign is advocating for a corporate tax decrease from the current 21% percent to as low as 15%. While the Harris campaign has suggested increasing the corporate tax rate to 28%. The campaigns’ differences towards the corporate tax rate will be closely monitored. The difference between a 15% corporate tax rate and 28% corporate tax rate has a meaningful impact on how future business operations will be structured.

Comparative tax positions are as follows.

General Tax Platforms
Harris Campaign	Trump Campaign	Both Candidates
Expansion of the Earned Income Tax Credit Increase the Earned Income Tax Credits for workers with children Increase the eligible age range to 19 and above Permanently extend enhanced premium tax credits Down payment support for first-time home buyers Similar proposal from Biden administration; expected to be broadly similar	Eliminate taxes on Social Security payments Extend the business tax provisions of TCJA	Elimination of taxes on tip income Promise to limit increases on those who make more than $400,000

Individual Rates
Current law: Highest marginal tax rate: 37% Higher standard deduction What happens in 2026 given no action: Highest marginal tax rates increase to 39.6% Standard deduction will be reduced by almost half and adjusted for inflation
Campaign Position
Harris campaign: Currently has no statement on individual rates and the standard deduction Assumption that Harris will allow the TCJA marginal rate reduction and higher standard deduction to lapse	Trump campaign: Maintain tax cuts from the TCJA such as the 37% marginal tax rate Maintain the standard deduction at its current level

Child Tax Credit
Current law: A taxpayer qualifies for the Child Tax Credit if they meet the qualifications, and their income is not more than $200,000 (or $400,000 MFJ) Current maximum credit is $2,000 What happens in 2026 given no action: Maximum credit will drop and the phaseout threshold will decrease to $75,000 (or $110,000 MFJ) Maximum credit will be $1,000
Campaign Position
Harris campaign: One of the pillars of the Harris campaign Permanent increase to the Child Tax Credit 5 years and under: $3,600 Older than 5 years: $3,000 Maximum age increase to 17 Additional $2,400 credit for families with newborns; $6,000 total	Trump campaign: VP candidate Vance discussed expansion of Child Tax Credit to $5,000, but unclear if this is an official Trump campaign position Child Tax Credit would begin to phase out at $400,000 The Other Dependent Credit would remain in effect

SALT Deduction
Current law: The itemized deduction for state and local taxes is capped at $10,000 What happens in 2026 given no action: Full itemized deduction restored
Campaign Position
Harris campaign: No official word	Trump campaign: No official word, but generally expected to keep the $10,000 cap on the SALT deduction as part of the plan to make TCJA permanent

Estate and Gift Tax
Current law: Current exemption amount is $13.61 million What happens in 2026 given no action: Reduction to pre-TCJA amount of $5 million indexed for inflation (generally expected to be around $7 million)
Campaign Position
Harris campaign: No current proposals Assumption that Harris will follow Biden’s FY 2025 Budget proposals Tighten estate tax rules	Trump campaign: Make TCJA estate cuts permanent by maintaining the current exemption amount

Business Provisions
Current law: Corporate tax rate: 21% Bonus depreciation phasing down to zero. Schedule is as follows: 2022 – 100% 2023 – 80% 2024 – 60% 2025 – 40% 2026 – 20% 2027 = 0% 20% deduction on pass-through business income What happens in 2026 given no action: Elimination of the 20% deduction on pass-through business income
Campaign Position
Harris campaign: Increase corporate tax rate to 28% Claw back depreciation deduction Special deduction for those who build affordable rental housing	Trump campaign: Decrease corporate tax rate to as low as 15% Restore business provisions to levels they were before the expiration of TCJA

While the results of the election will undoubtedly lead to changes in tax policies, it is unknown what will make it into actual legislation, when new laws will be passed, and when new laws will take effect. Taxpayers will need to work closely with their tax advisors to prepare for future tax uncertainty, and, in the meantime, plan appropriately for the many TCJA provisions that might expire at the end of 2025.

KSM closely follows tax and legislative activity across the country. Thus, if you have questions about how these changes might impact your business, please contact your KSM advisor or fill out this form.