How a Trump Presidency Can Impact Tax Policies for the Rich
Written by
Chris Adam
Edited by
Cory Dudak
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Donald Trump and Joe Biden have very different opinions when it comes to taxes and tax policies for the rich. The outcome of the presidential election will have a major impact on taxes paid by some of the wealthiest individuals in the United States.
Here’s a look at how a second term for Trump could impact tax policies for the rich.
Taxes on the Wealthy
Trump has maintained during his campaign that keeping taxes low for the wealthy is a way to supercharge investment and create more jobs. The former president has said tax hikes would crush the economy as it continues to recover from the effects of inflation.
Tax Cuts and Jobs Acts
Whoever wins the November election will face a big challenge when it comes to tax cuts. Many of the cuts that Trump signed into law in 2017 will expire at the end of 2025. As the Tax Cuts and Jobs Act is set to expire, it’s setting up questions about how much taxpayers across various income levels should pay as the national debt continues to climb.
“Extending the Trump tax cuts that expire at the end of 2025 – namely, the law’s individual income and estate tax provisions – would provide further windfall benefits to high-income households,” according to the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.
Tax Breaks for Pass-Through Businesses
Overall, Trump’s 2017 tax cut reduced income tax rates for the vast majority of people in the U.S. – that includes the wealthy and many lower-income workers. However, there also was a provision that offered a break for owners of so-called pass-through businesses. Those are entities that aren’t taxed because the profits flow through to the owners, who are individually taxed. Such provisions are generally favored by hedge funds and privately held companies.
Tariffs on Foreign-Made Goods
Trump also has called for higher tariffs on foreign-made goods, which are taxes that could affect shoppers in the form of higher prices. At the same time, according to Fortune, his campaign is committed to tax cuts, while saying Trump would reduce the national debt.
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