Jim Cramer Says If You Care About Your Paycheck, You Should Vote for Trump — Here’s Why
Written by
G. Brian Davis
Edited by
Daria Uhlig
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Jim Cramer, the outspoken host of CNBC’s “Mad Money,” told fiscally-minded “Squawk on the Street” viewers that they should vote for Trump.
“If you’re in the stock market, if you care about your paycheck, you go with Trump,” Cramer opined in an early August appearance on the show. “That’s what you do.”
His colleague at CNBC, David H. Faber, seemed skeptical. “You do?”
“Yeah, well, he wants to cut your taxes,” continued Cramer.
It raises interesting questions around how Trump’s tax policies compare to those of his opponent, Vice President Kamala Harris.
Trump Tax Policies
The Tax Cuts and Jobs Act of 2017 (TCJA) arguably marked the signature legislation from Trump’s time in office. It included many changes to the tax code, some small, some sweeping.
Most significantly for many Americans, the TCJA eliminated the personal exemption but doubled the standard deduction. That not only lowered many Americans’ tax bills, it also simplified their tax returns, allowing them to take the standard deduction rather than itemize each deduction. But at the same time, it limited mortgage interest and property tax deductions for homeowners who opted to itemize their deductions.
The TCJA also restructured the seven income tax brackets, lowering the effective tax rate for many earners. In a boon for generational wealth transfers, it also doubled the lifetime gift and estate tax exemption.
On the business side, the TCJA lowered the corporate tax rate from 35% to 21%. Businesses and investors could also take advantage of bonus depreciation for accelerated tax write-offs.
Many of these tax changes are scheduled to expire by the end of 2025. However Trump has made it clear that he plans to push for a renewal of these tax changes should he win in November.
Harris Tax Proposals
Suffice it to say that Vice President Kamala Harris has a different vision for tax policy.
It comes as no surprise that Harris has called for retracting many of the tax changes in the TCJA and raising individual tax rates on the top 1% of earners. Harris has also proposed raising the corporate tax rate from 21% to 35%.
Perhaps more surprising is her proposed 4% “income-based premium” tax on households earning more than $100,000 to pay for what she called “Medicare for All” in the 2020 Democratic primary. The Biden-Harris White House has proposed raising the Medicare tax for taxpayers with income above $400,000 from 3.8% to 5%.
However, Harris plans to introduce a “LIFT the Middle Class Act” that would create a refundable tax credit for low- and middle-income taxpayers.
Meanwhile, first-time and certain other homebuyers could see $10,000 in tax credits under a Biden-Harris plan proposed in March.
But many investors worry about another White House proposal, which would more than double capital gains tax rates to up to 44.6% for taxpayers who make $1 million, according to Kiplinger’s.
The Biden-Harris Administration further troubled many taxpayers with calls to limit “back-door” Roth individual retirement accounts and impose new distribution rules on high earners with over $10 million in retirement accounts.
Final Thoughts
In one quirk of this election cycle, both Harris and Trump have campaigned on eliminating taxes on tips for service industry workers.
They both want to appear worker-friendly, yet economists have criticized the proposal as impractical. Some go so far as to say that it helps big businesses over workers.
This election year has come with plenty of surprises, and Americans can expect a few more twists and turns before November.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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