Contrasting Tax Policies of Trump and Harris
With the 2024 electoral season warming up, the contrasting tax policies of Donald Trump and Kamala Harris have illuminated a key issue for voters. As Trump’s and Harris’s contrasting plans take shape, voters need to understand not just what the plans propose but also who would pay for them, who would benefit from them, and how they would affect the economy in both the short and long terms. After all, with the appearance of recession, rising inflation, and an economy still trying to recover from the impacts of the COVID-19 pandemic, the issue of taxes, and particularly who pays them and who doesn’t, couldn’t be more timely.
This article looks at the fundamentally different tax-cut plans proposed by Donald Trump and Kamala Harris. These plans reflect contrasting economic ideologies and carry very different implications for American society, especially for families in the middle class and for the distribution of wealth in our nation. A tax system is not just about numbers; it is an expression of a society’s values and spending priorities. According to the Tax Policy Center, Trump’s plan could reduce federal revenue by over $6.5 trillion over the next ten years, while Harris’s plan would raise nearly $5 trillion over the same period.
These policies could have monumental effects, reaching nearly every part of the federal budget, from healthcare and education to social security and infrastructure development. As Harris puts it, “Billionaires and big corporations must pay their fair share in tax.” This is a sentiment that resonates—certainly that I believe should resonate—with a growing portion of the electorate. It’s also a counterpoint to Trump’s approach, which includes significant tax cuts for corporations and the wealthy, and raises the specter of ever-greater economic inequality. The tension between these two philosophies clearly encapsulates a much-broader debate—one that I only have time to touch on here, and not in much detail—that’s about fairness and equity and the proper role of government in economic regulation.
Trump’s Proposed Tax Cuts and Tariffs
Donald Trump’s tax policy is largely a continuation of the agenda from his previous administration. Like the Trump presidency, the Republican campaign platform features substantial tax cuts that mainly benefit corporations and high-income earners. His plans call for extending the 2017 tax cuts (which reduced tax rates and doubled the child tax credit) and for keeping the rate for working families (virtually the same) at 15 percent and 17 percent.
Advocates of Trump’s tax plan frequently assert that it will lead to enhanced consumer spending and heightened economic growth, which will, in turn, benefit all Americans. But what does the evidence say? The evidence, particularly from the Congressional Budget Office, suggests that the 2017 tax cuts did not significantly boost economic growth. Furthermore, there are some concerns about the plan’s heavy reliance on tariffs as a revenue source. They almost certainly affect consumers adversely. Tariffs are not really a way to get American manufacturers to run their factories here in America; they are a way to get American consumers to pay more for the stuff they are buying. And they hit middle-income consumers hardest, since those consumers spend more of their income on imported goods.
Trump’s tariffs could add as much as $1,700 a year to the bills of the average American household, according to one study.
Harris’s Tax Plan and Child Tax Credit Expansion
On the other hand, Kamala Harris’s tax policy is clearly tilted toward supporting middle- and lower-income families and achieving progressivity by imposing higher taxes on the wealthiest Americans and corporations. The plan the Vice President put forth also suggests that taxes on the rich should be raised. This isn’t a new idea, but it is a classic Democratic one. Harris’s proposals house the specter of “the rich” in a number of specific sections. She plans that folks making more than $100 million a year pay a minimum income tax, for instance. She wants to make sure that someone like Elon Musk, who by many accounts is also pretty “rich,” isn’t able to get away with paying no taxes, as he has, and instead contributes to the American economy in a meaningful way. These proposals—by Harris and by the Democrats as a whole—presume that income inequality is undermining the economy.
According to the Institute on Taxation and Economic Policy, Trump’s proposed tax cuts would bestow a staggering 83% of their benefits on the top 1% of earners. In this respect, his plan does little more than entrench even further the yawning economic disparities that have opened up all over the country. Harris, on the other hand, approaches the complicated issue of taxation from a more traditional, if not quite recent, perspective. She is proposing to raise taxes on the corporations and the so-called super-rich, aiming to restore some balance to a system that has tilted very sharply in favor of both.
Potential Impacts of Expiring Tax Cuts by 2025
Still, far from saying that wealth inequality is okay, Harris’s critics have to admit that it isn’t. The average American is touched in a very deep way by these tax policies. When we look at these two candidates and their two parties and what they propose, we can see very clearly that one is offering us the chance, the opportunity, to go back to a more evidently equitable society. The progressive taxation system that Kamala Harris proposes is not just a well-thought-out thing for tax wonks to talk about; it has real implications for the next generation. On the other hand, what Donald Trump proposes may look like a short-term kind of appeal to some people, but it really is a way of moving us toward more of a financially strained society that is inequitable.
It is not just a sound bite for political rallies, but a potent social concern that must be dealt with if we care about the future of the country: the gulf between the haves and have-nots, and a growing number of experts and everyday folks among the latter who question the wisdom of a system that allows the rich to not just get richer but also to shelter much of their wealth from taxes. On one level, this is a story about contrasting tax policies associated with two leading political figures—Donald Trump and Kamala Harris. On another, it’s a chapter in a broader ideological story about the kind of economy we want.
This is a complicated and dangerous territory, and it’s absolutely necessary to chart a clear and firm course. In the words of Harris, “We have a choice to make.” That choice will determine not just our policies but, as they said just the other day in a press briefing, “the very fabric of our nation.”