Both presidential candidates plan to make changes to the tax code, but largely in opposite directions. While President Donald Trump plans further tax reductions, his opponent, former Vice President Joe Biden, plans to raise taxes on the rich and businesses.
Both candidates are also proposing a number of tax incentives for particular behaviors.
Biden would give tax breaks to those who buy electric cars, install solar panels, or make their homes more energy efficient. Further credits would go to babysitters, the elderly, and those who pay more than 30 percent of their income toward rent.
Trump would expand the Opportunity Zones in depressed areas, give tax breaks to companies that bring manufacturing back to America, and put tariffs on imports of off-shored manufacturing.
Biden, too, proposes tax incentives for companies investing in American manufacturing, but according to Tax Foundation, a tax policy think tank, the incentive is not large enough to offset his tax hikes and so it’s unclear if it would actually convince businesses to invest.
Biden’s tax hikes mostly target businesses and people earning over $400,000. Corporate tax would rise from 21 percent to 28 percent. He would also impose a 15 percent minimum tax on large businesses and double the tax on international profits from 10.5 percent to 21 percent.
On the personal side, those earning over $400,000 a year would see the top income tax bracket increase from 37 percent to 39.6 percent. Income above $400,000 would get an additional 12.4 percent tax, half of which would be paid directly by employers. People in this income bracket would also face curtailed tax deductions. Capital gains above $1 million would be taxed at 43.4 percent, instead of the current 23.8 percent.