2024 election insights: Comparing tax policy platforms
The results of the upcoming election will have a substantial impact on the future of tax policy. Given tax policy’s influence on the economy and the magnitude of the potential Tax Cuts and Jobs Act (TCJA) of 2017 expirations, a comparison of party platforms offers valuable insights into the possible post-election landscape.
Presented below is a broader focus on party tax policy platforms rather than the individual plans of presidential candidates. While presidential budgets and tax proposals often influence legislation, only Congress has the authority to enact it. Financial measures originate in the House of Representatives and may be altered by the Senate. Identical bills must pass both chambers before the president can sign a bill into law; accordingly, tax legislation is often driven by lawmakers’ priorities. However, presidential platforms are briefly discussed at the end of this section.
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Tax policy platforms
The charts and discussion in the sections below are primarily based on:
Republicans
A primary goal of making the temporary TCJA provisions permanent (as outlined in the RNC 2024 platform), significant comments from influential Republican lawmakers (including Senate Finance Committee Ranking Member Sen. Mike Crapo (R-ID), Ways and Means Chairman Rep. Jason Smith (R-MO), House Speaker Mike Johnson (R-LA), and others), notable comments from Former President Donald Trump, support for and opposition of the recently quashed bipartisan tax bill, and other relevant information.
Democrats
A primary goal of rolling back the temporary TCJA provisions for taxpayers making over $400,000, the FY25 Green Book (released by President Joe Biden’s administration), the 2022 Inflation Reduction Act (IRA), significant comments from influential Democratic lawmakers (including Senate Finance Committee Chair Ron Wyden (D-OR), Ways and Means Ranking Member Richard Neal (D-MA), Senate Majority Leader Charles Schumer (D-NY), and others), notable comments from Vice President Kamala Harris, support for and opposition of the recently quashed bipartisan tax bill, and other relevant information.
The positions discussed below are the generally supported tax policy proposals by party; though, in both groups there may be lawmakers who disagree with and/or support a different version of a proposal. Republicans and Democrats have recently begun organizing and strategizing around the 2025 fiscal cliff and are in the process of developing more comprehensive plans. Ways and Means Republicans, led by Smith, have formed “tax team” working groups and are seeking taxpayer comments on the impact of the potential 2025 expirations, which can be submitted on the Ways and Means portal. Meanwhile, Senate Democrats, led by Wyden, have begun meeting and are developing a “revenue menu” of ideas and priorities.
Business tax
The largest difference in the Republican and Democratic business tax policy platform is the proposed corporate tax rate. Republicans would like to maintain or even decrease the current 21% corporate rate, while Democrats would like to see an increase to 28%, which is still well below the pre-TCJA 35% rate. Though they are not listed in the chart below, some Democrats have supported other business revenue raisers, such as an increase to the 1% stock buyback tax rate, an increase to the 15% corporate alternative minimum tax rate, limitations on the deductibility of executive compensation, etc.
There are several areas of consensus among Democrats and Republicans, including reform for the deductibility of business interest expense and domestic research and experimental expenditures. These were highlighted in the bipartisan tax bill, which received overwhelming support in the House but failed to advance in the Senate, where Crapo opposed the bill due to the Child Tax Credit (CTC) provisions.
| Provision | Republicans | Democrats |
| Corporate tax rate | Most are in favor of maintaining or reducing the corporate tax rate. Proposals for a decrease range from 20% to 15%. Only a few members have voiced support for a minor increase. | Most support an increase in the corporate tax rate. The FY25 Green Book and Harris both proposed a corporate rate of 28%. |
| Section 199A/qualified business income (QBI) deduction | Many would like to make this provision, currently set to expire after 2025, permanent. | Some have been critical of allowing the deduction for higher-income taxpayers. Democrats’ pledge not to raise taxes on individuals making less than $400,000 presumably includes maintaining the QBI deduction for taxpayers in those income brackets. |
| Research and experimental (R&E) expenditures | Support the immediate expensing of domestic R&E expenditures. | Support the immediate expensing of domestic R&E expenditures. Some also support immediate expensing of foreign R&E (as proposed in the BBB framework). |
| Business interest deduction limitation | Support a return to calculating adjusted taxable income (ATI) with the pre-2022 parameters that allowed for addback of depreciation and amortization. | Support a return to calculating ATI with the pre-2022 parameters that allowed for addback of depreciation and amortization. |
| Inflation Reduction Act (IRA) renewable energy credits | Many support a full or partial repeal of the IRA's renewable energy credits. | In favor of retaining the IRA’s renewable energy credits. |
Individual tax
Most of the TCJA’s expiring provisions impact individual taxpayers.
Republicans would like to make all of the expiring individual provisions permanent. However, the cost associated with a full extension is substantial – of the Congressional Budget Office’s (CBO) $4.6 trillion estimate presented earlier, $3.7 trillion is attributable to the TCJA’s individual provisions. It may be difficult for Republicans to find “pay-fors” to cover some or all of the cost of extension.
In recent months, Harris has pledged to honor Biden’s campaign promise not to raise taxes for taxpayers making less than $400,000. Democrats would like to see rate increases for taxpayers over that threshold, returning to a pre-TCJA maximum of 39.6%. Additionally, many Democrats support additional revenue raisers targeted at wealthy individuals such as the expansion of the net investment income tax and/or a wealth tax for ultra-high-net-worth taxpayers.
| Provision | Republicans | Democrats |
| TCJA rates and brackets | Support making TCJA bracket sizes and tax rates permanent. | Support making TCJA bracket sizes and tax rates permanent for taxpayers making less than $400,000. The FY25 Green Book proposed a top rate of 39.6% for single and married filing jointly taxpayers to $400,000 and $450,000, respectively. |
| Child Tax Credit (CTC) | In favor of extending the current CTC amount ($2,000 per child) and thresholds, which were increased under TCJA and are set to expire after 2025. | Most would like to see the CTC expanded to provide a benefit of $3,000 per child ($3,600 per young child) and to make it fully refundable, as it was in 2021 under the American Rescue Plan. Harris also proposed a $6,000 credit for the first year of a child’s life. |
| Other TCJA Items (Standard deduction, personal exemption, itemized deductions) | Support a permanent extension of the TCJA’s individual provisions. | Support a permanent extension of the TCJA’s individual provisions for taxpayers making less than $400,000. |
| State and local tax (SALT) limitation/cap | Most oppose repealing or increasing the SALT cap, with the noted exception of several lawmakers who live in high-state taxes like NY, NJ, and CA. | Some support a repeal of or increases to the SALT cap. Biden opposed changes to the SALT cap, but Harris has not yet provided a position. |
| Wealth tax | Generally oppose a wealth tax or minimum tax rate for ultra-high-net-worth taxpayers. | Some would like to institute a wealth tax or a minimum tax rate on ultra-high-net-worth taxpayers. There is not consensus or consistency among proposals and Harris has not endorsed any wealth tax. |
| Taxation of gratuities | Trump proposed “no tax on tips.” Republicans in both chambers have introduced bills that would effect this change. | Harris also proposed eliminating taxes on tips, along with an increase in the minimum wage. |
| Affordable Care Act (ACA) subsidies | Most oppose an extension of the subsidies, set to expire after 2025. Some support a full repeal of the ACA. | Support an extension of the ACA subsidies, set to expire after 2025. |
| First time homebuyer credit | No significant proposals. | Harris proposed a $10,000 credit for first-time homebuyers, along with other home building and buying incentives. |
Trust, estate and gift tax
The estate tax exemption is the primary focus in this area. Generally, Republicans would like to see the current amount ($10 million per taxpayer, indexed for inflation; $13.61 million for 2024) extended or the entire estate tax repealed and Democrats prefer to make it more restrictive; however, this is an overly simplified view. Each party has a myriad of proposals from members, each of which may address an individual exemption amount, a spousal exemption amount, the tax rate, treatment of unrealized capital gains and step-up basis treatment.
| Provision | Republicans | Democrats |
| Exemption amount | Typically support a continuation of the current estate tax exemption levels; however, many would prefer a full repeal of the estate tax. | Opinions vary and there is no consensus or consistency in proposals from lawmakers who would like to see changes. |
International tax
While both Democrats and Republicans are concerned with multinational entities (MNEs) shifting their profits to lower-tax countries, they fundamentally disagree on the best approach to foreign tax policy.
The primary dispute centers around whether the United States should adopt the Pillar Two framework. Under the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework, approximately 140 countries have agreed to a two-pillar global solution. The second pillar of the solution, often referred to as Pillar Two, applies to large MNEs, ensuring they pay a global minimum effective tax rate of 15% on income arising in each jurisdiction in which they operate.
The Biden administration was involved in the development of the global tax agreement and fully supports its adoption. Correspondingly, most Democrats would like to shift foreign tax policy to align with the OECD’s Pillar Two. They believe it will result in the best outcome for the United States in the long run for both tax collection and global trade relations.
Republicans oppose Pillar Two and believe it will lead to the United States losing tax revenues to foreign countries. Instead, Republicans favor the current TCJA foreign tax provisions. Several of those provisions have scheduled rate changes that will go into effect in 2026 absent Congressional action. Republicans would prefer to avoid these tax increases, in addition to making a few other tweaks to how MNEs are currently taxed.
Below is a comparison of the current rates, which Republicans would prefer to keep, scheduled changes to rates under TCJA and portions of Biden’s FY25 Green Book foreign tax proposals, which generally align with Democratic priorities.
| Provision | Current TCJA treatment | Planned 2026 TCJA treatment | Green Book proposed treatment |
| Global intangible low-taxed income (GILTI) | Effective tax rates are typically between 10% and 13.125%. | Effective tax rates increase to between 13.125% and 16.406%. | Making adjustments that, coupled with an increase in the corporate tax rate, would result in an effective rate of 21% to 22.105%. |
| Foreign-derived intangible income (FDII) | Deduction of 37.5% of a domestic corporation’s FDII. | Deduction scheduled to decrease to 21.875% deduction. | Repeal the FDII deduction. |
| Base erosion and anti-abuse tax (BEAT) | Minimum tax rate of 10% of modified taxable income. | Schedule to increase minimum tax rate to 12.5% of modified taxable income. | Replace BEAT with an undertaxed profits rule (UTPR) similar to Pillar Two. |
The rates in the table above are applicable to domestic corporations. Global intangible low-taxed income (GILTI) rates would also apply to individual taxpayers under a section 962 election.
Other items
There are two additional items where Democratic and Republican tax priorities diverge that are worth noting:
Deficit creation
As previously discussed, the cost of extending all TCJA expiring provisions approaches $5 trillion over 10 years. Republicans and Democrats are not aligned on whether, or how much of, any tax reform bill should be offset, or paid for, by revenue raisers.
Republicans
Are not united in their approach. Some are concerned with the rapidly increasing national debt levels while others are less bothered and/or do not believe CBO scoring of revenue and expenses is accurate. Some Republicans argue the CBO does not account for additional economic output that results from stimulating policies.
Democrats
Largely want to ensure that tax reform is offset, or paid for, and does not increase the national debt. For Democrats, increases to taxes on large businesses and high-income individuals would ideally cover or exceed the cost of additional tax cuts.
Internal Revenue Service funding
Republicans and Democrats disagree on the level of Internal Revenue Service (IRS) funding needed, particularly for the IRS’s enforcement functions. The 2022 Inflation Reduction Act (IRA) provided approximately $80 billion in supplemental funding for the IRS, approximately $46 billion of which was allocated to enforcement. Earlier in 2024, Republicans were successful in clawing back $20 billion of funding as part of a bipartisan government funding deal.
Republicans
Would like to continue to reduce both the special allocation as well as annual government funding. The most recent Republican FY25 budget proposal reduced annual funding for the IRS by $2.3 billion (16%) and came in $2.5 billion (17%) below the President’s proposal. The vast majority of proposed funding reductions came from enforcement.
Democrats
Would like to maintain annual IRS funding levels and the remaining $60 billion of the special allocation. Democrats are championing investment in IRS enforcement, stating every $1 spent on enforcement generates between $5 and $9 in revenue.
Presidential platforms
Neither presidential candidate has released a comprehensive tax plan; however, both have made several notable proposals, and Harris released some broader economic plans. Below is snapshot of each candidate’s stated tax policy priorities:
Trump
Extend all expiring TCJA provisions, decrease the corporate tax rate to 15% for companies who manufacture within the United States, expand R&D credits and other manufacturing provisions, eliminate tax on social security benefits, eliminate tax on gratuities, eliminate tax on overtime pay, restore the SALT deduction, reform the U.S. expatriation tax regime, implement a 10% to 20% tariff on all imports and a 60% tariff on Chinese imports, unwind the IRA renewable energy credits
Harris
Allow TCJA provisions for taxpayers making over $400,000 to lapse, increase the corporate tax rate to 28%, eliminate taxes on gratuities, increase the child tax credit, extend the Affordable Care Act subsidies, provide incentives for first-time homebuyers and renters, increase deductions for start-up businesses, implement the America Forward credit targeting "key strategic industries," supports tax increases proposed by Biden administration (which can be found in the Green Book) aside from the capital gains rate, which Harris would cap at 28%
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Last updated Oct. 14, 2024
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