Will taxes go up after 2024 election? Trump, Harris have different plans

No matter who wins the 2024 election, the next president of the United States has to address the future of tax policy for one big reason: Around $5 trillion worth of tax cuts, passed under the Trump-era Tax Cuts and Jobs Act of 2017, are set to expire next year.

Should these provisions sunset, most Americans will be on the line for more taxes in 2026. The 2017 changes included lower income tax rates and inheritance taxes, higher tax deductions for charitable donations, lower corporate taxes and higher standard deductions for almost all taxpayers.

In recent rallies and speeches, Vice President Kamala Harris and former President Donald Trump have promised to lower taxes — just for different groups of voters. Both have promised bigger child tax credits and to slash taxes on tips.

Trump has said he would like to make permanent the the tax package he negotiated with Congress in 2017, while Harris has repeated President Joe Biden’s pledge not to raise taxes on any households making less than $400,000 a year, and in her convention speech said she would cut taxes for middle class families. She has also said she wants to raise taxes on higher income families and on corporations.

But Tax Foundation Vice President Will McBride said neither of the candidates have provided enough specificity about the policies they want to pursue.

In 2012, Sen. Mitt Romney, facing the incumbent former President Barack Obama, rolled out his 59-point economic plan that included detailed tax measures he favored, McBride recalled. “These candidates aren’t doing that,” he added.

The Tax Foundation expert told the Deseret News both candidates are also ignoring the problem of the U.S. national debt, which has ballooned to more than $35 trillion, and, instead, they’re proposing “very large tax increases.”

In Trump’s case, it’s tariffs on imported goods. This idea risks instigating a global trade war. Meanwhile, Harris’ tax hike proposals “would essentially throw sand in the gears of the economy,” McBride said.

“Their vague notions are very dangerous,” said McBride, “and this is exceptionally irresponsible, given the status of the debt in this country.”

When it comes to reducing taxes for lower- and middle-class Americans, Trump and Harris agree on a whole lot more.

What is former President Donald Trump’s tax plan?

Trump’s policy proposals, Agenda47, include a plan to make “the provisions of the Trump Tax Cuts and Jobs Act (TCJA) that doubled the standard deduction” permanent.

McBride said institutionalizing the 2017 tax changes is one of the few reasonable ideas he’s heard. “Although it was a tax cut, it generated a lot of revenue,” he said.

Utah’s consumer-driven economy thrived under these tax cuts, according to Derek Miller, the CEO and president of the Salt Lake City Chamber. He said the Beehive State’s tech industry, as well as its life sciences and manufacturing industries, reaped the benefits of a lower corporate tax rate of 21%, compared to the previous 35%.

These industries require high capital investments, and after the 2017 tax breaks, their investments became deductible, giving businesses room to expand, he said.

Harris, mirroring the Biden White House’s proposal, supports hiking the corporate tax rate to 28%.

Before Biden bowed out of the 2024 presidential race, Utah Rep. Blake Moore, the vice chair of the Republican Conference, in an interview cited a book titled “Never Split the Difference: Negotiate As If Your Life Depended On It,” and said “It almost feels like lazy to me” to “split the difference” between the previous and current tax rates, rather than figure out where the tax rate should be.

Could Democrats and Republicans ‘agree to agree’ on tax breaks?

Andrew Lantz, the associate director of Bipartisan Policy Center’s economic policy program, told the Deseret News Republicans view the Trump-era tax package as “the best thing since sliced bread” and Democrats view it as “one big tax scam.”

Liberal-leaning advocacy group Center for American Progress argues the TCJA overwhelmingly benefitted wealthy taxpayers and proved to be costly, saying there isn’t enough evidence it “delivered promised growth or improved well-being for the vast majority of the nation’s workforce.”

Lantz said he is less focused on the political rhetoric but on the “likely policy reality” of next year. On the one hand, Harris adopted the Biden administration’s pledge to not hike taxes for anyone making under $400,000, while on the other, Republicans want to make the TCJA permanent.

“As a part of their official party platform, both parties support making trillions of dollars of tax cuts that are expiring at the end of next year permanent,” Lantz said. “At a certain point, the parties are going to need to agree … to agree.”

The TCJA originally doubled the child tax credit from $1,000 to $2,000. In a recent CBS interview, Trump’s running mate Sen. JD Vance, R-Ohio, floated the idea of increasing this tax credit to $5,000. Their opponent Harris’ plan? $6,000 in child tax credits.

Moore said there underlying bipartisan support for the TCJA and he believes the Democrats will not allow the 2017 tax provisions to sunset. Despite winning control over the White House and Senate, Biden “didn’t touch the tax cuts,” Moore, who represents Utah’s 1st District, said.

“There’s a recognition from President Biden and his administration that a lot of those tax provisions are actually pretty darn good,” the Utah congressman added.

But Moore said he is concerned about government spending and its potential to trigger inflation, as well as the rising national debt.

“We can’t just rely on just doing tax reform — which I support completely because I do believe it’s a strong economic factor,” he said. “We need to make sure as Republicans that we’re looking at our national spending.”

Trump and Harris promise No tax on tips

Harris has largely adopted the Biden White House’s policy proposals, but she is also attempting to distinguish herself from Biden.

One of her proposals — mimicking Trump — is exempting tips from taxation, said Bipartisan Policy Center’s Lantz. Since then, the president has signaled support for this proposal.

Trump proposed the idea before Harris at a rally in Las Vegas, Nevada, a critical swing state.

“I don’t think it’s an accident that both candidates laid out their support for this proposal in or around Las Vegas in Nevada,” a place ripe with restaurants, bars, casinos and a “powerful” service union, said Lantz.

Experts like Lantz and McBride from the Tax Foundation agree that neither candidate has revealed enough details about a no-tax-on-tips policy, which would require guardrails to prevent abuse and tax avoidance.

Whether it’s ending tax on tips or increasing child tax credits, the biggest challenge for Harris and Trump is balancing the budget.

“How are you going to pay for that expansion?” Lantz asked. “Because it’s hard enough for Congress and the president to identify ways to pay for $5 trillion in expiring tax cuts, but to pay for another $500 billion or a few trillion in new tax cuts? That’s even harder to do.”