Now that the United States Presidential Election is over, we can sure a take a retrospective look at some of the manifestos discussed by both parties. And while all subjects covered in the manifesto is very important, the issue of Tax cannot be overemphasized. Irrespective of what you earn as an average citizen, you just can’t do without paying Biden vs Trump Tax Plan your tax. Therefore, it is safe to say that a candidate’s tax plan can make or mar his ambitions at the polls, not to mention, determine the economy of the U.S.
The just concluded election in the U.S. saw Donald Trump and Joe Biden go head to head at the polls, and with Donald Trump building on his achievements in his first tenure. One of the great achievements he recorded in his first regime was the reduction of the tax bracket in 2017 which was favorable and made life easy for every citizen. Following are the detailed information about Biden vs Trump Tax Plan
In contrast, Joel Biden took a different stance from what Trump had started in 2017. During the presidential debate he aired his opinion about the reduction of the tax plan which was absolutely different from Trump’s agenda. This, of course, suggests that their stance on the economic condition of the nation too would be different.
Considering the nature of the debate and the content of each candidate’s agenda, one may be quick to judge that Trump will be brought in for his second term. Why, you asked. One major blueprint in his agenda that can move an average American to want to vote him in again, is his tax plan which is out rightly low as compared to Biden’s plan.
Trump’s Tax plans
During Trump’s first term in office, the assumed income tax of an average American according to the provisions of the Tax Cuts and Jobs Act (TCJA) expected to expire in 2025, is set on 38% and the tax cut was expected to cost the government close to $1.5 trillion. This, of course, is capable of affecting the nation’s economy as when the tax is reduced, the government’s means of revenue is reduced. As such, the country may run in deficit but Trump needs to be asked how he managed his first term in office with a reduced tax bracket and the nation did not record any debt. Whether he was able to manage it or not may not really be a big issue as long as the load is not heavy on the citizens and the nation’s economy is not dwindling.
However, Trump had another plan to reduce the tax plan again if he were to be voted in for his second term which of course, will reduce the percentage of the people’s income, profits or assets that will be paid to the government.
He had plans for companies to enjoy tax credits and expand the opportunity zones program which will boost the investment in some economically distressed communities. Other reductions Trump promised to do during the debate included the Obamacare Medical aid which would have removed 3.8% of tax surcharge on the investment income and the capital gains rate which was supposed to reduce to 15% from 20%. His income tax was planned to reduce to four as against seven hanging on 37% while the standard deduction was planned to be raised to $12,400 from $6,400 for Singles and $24,800 from $12,400 for Married Filing Jointly and the corporate tax was planned be lowered to 21% from 35%.
Biden’s Tax plans
Biden’s tax plan was the direct opposite of Trump’s plan as he expressed his dissatisfaction with the reduction Trump made in 2017 and planned that he will raise the income tax rate back to 39.6% from 37% and the maximum corporate income tax rate to 28% from 21%. Perhaps he was not putting into mind the economic condition of the citizens as this tax plan will not be favorable for the low income earners. Although the high income earners too will have a share but their ordeal will not be as critical as with the low income earners. However, this plan appears to be a promising way of building the nation’s economy.
In addition, Biden proposed there will be application of Social Security taxes to the income of high income earners with an average income of at least $400,000 while other tax rates such as the tax capital gains and dividends will remain at the ordinary rates for annual income earners of over a million dollar. This plan also included levying on corporate bodies 15% minimum tax on their income.
Biden, as against Trump, believes when you earn high, you should pay more.