As the 2024 presidential election looms ahead, taxes have once again taken the center stage in the political arena. From President Biden’s claims of implementing the largest tax cut in American history to former President Trump’s warnings of tax hikes, the debate surrounding tax policies has left many confused and uncertain. To shed light on the candidates’ tax proposals, it is crucial to compare historical tax changes, tariffs, and new campaign promises to understand the potential impact on the economy.
Comparing Biden’s and Trump’s Tax Proposals
President Biden has set forth ambitious tax plans for the future, aiming to increase the corporate income tax rate, corporate alternative minimum tax, and top individual income tax rate. These proposals, on a gross basis, would lead to a significant increase in taxes before offsetting reductions through other mechanisms.
- Biden’s plan indicates a comprehensive tax overhaul that would result in a net increase in tax revenue by 0.94 percent of GDP, ranking as one of the largest tax increases in history.
Former President Trump, on the other hand, has hinted at potential tax and tariff adjustments that could impact revenue streams. Although no formal plan has been released, his proposals include tariff hikes, corporate tax rate reductions, and making changes from the Tax Cuts and Jobs Act permanent. -
Trump’s tax and tariff proposals could lead to a notable decrease in revenue by 0.5 percent of GDP, marking one of the substantial tax cuts enacted since 1940.
Where Do the Candidates Stand on Taxes?
As the countdown to the election continues, it is essential to compare the tax plans of both candidates to understand their implications on the economy and individual taxpayers.
Largest Tax Increases since 1940
Throughout history, tax increases have been instrumental in funding wartime efforts and significant government spending. The biggest tax hikes, occurring from 1941 to 1951, played crucial roles in financing defense during WWII and the Korean War.
- Recent tariffs imposed in 2018-2019 under President Trump represent a moderate tax increase, ranking as the 21st largest since 1940.
- President Biden’s Inflation Reduction Act ranks among the largest tax hikes, although its actual revenue effects remain uncertain in the long term.
Largest Tax Decreases since 1940
Conversely, significant tax reductions have also played key roles in relieving tax burdens and stimulating economic growth. Over the years, tax cuts ranging from the postwar era to modern legislation have resulted in substantial reductions in revenue.
- The 2017 Tax Cuts and Jobs Act signed under Trump marked a significant tax cut, ranking among the top ten since 1940.
In light of the historical context and proposed tax changes by the candidates, it is crucial for voters to understand the potential impact of these policies on their financial well-being and the broader economy. Stay informed on the evolving tax landscape and make informed decisions at the ballot box. Let your voice be heard, and stay empowered by being knowledgeable about the tax policies that affect you.
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