Taxation
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As 2025 approaches, the future of your tax bill could hinge on who wins the next presidential election. Trump and Harris have both centered economic growth in their campaigns, but they’re taking very different routes to get there—especially when it comes to the expiring provisions of the Tax Cuts and Jobs Act (TCJA). Whether you’re a middle-class worker, small business owner, or part of the high-income bracket, these proposals could have major implications for your finances.
A Taxing Decision in 2025
Diverging Visions for Economic Growth
While both candidates support tax cuts to boost the economy, the key difference lies in who benefits most. Trump leans into extending the TCJA without needing to balance the budget, trusting that economic growth will eventually pay the bill. Harris, however, is focused on equity—her plan targets tax relief for lower and middle-income Americans while raising taxes on the wealthy and corporations to offset the costs.
Harris’s “Opportunity Economy” Approach
Harris has coined her vision as an “opportunity economy,” prioritizing financial support for working families, small businesses, and first-time homebuyers. True to the Biden administration’s pledge, she vows not to raise taxes on those earning under $400,000. Her strategy includes expanding tax credits and allowing high-income tax benefits, like the TCJA’s doubled estate tax exemption, to expire.
Trump’s Growth-Driven Game Plan
Trump is doubling down on growth-first economics. He plans to extend TCJA tax cuts and possibly introduce a new middle-class tax cut via payroll relief or standard deduction hikes. He’s also eyeing tax exemptions for seniors on Social Security and aims to eliminate taxes on overtime pay. Unlike Harris, he doesn’t propose revenue offsets, banking instead on growth to cover costs.
Where Trump and Harris Find Common Ground
Despite their differences, both candidates do agree on a few key points. They support expanding the child tax credit and offering tax relief for tipped workers. They’re also in favor of easing the tax burden on the middle class—Harris through targeted extensions, Trump with broader tax reductions. Interestingly, both have warmed to reinstating the state and local tax (SALT) deduction, which has been a hot-button issue since the TCJA capped it at $10,000.
Reversing the Less Popular TCJA Changes
Democrats, backed by Harris, are eyeing a rollback of some of the more controversial TCJA changes that took effect after 2021, like limitations on R&D and interest deductibility. They also want to pause or undo the phase-out of bonus depreciation. Trump, while less vocal on these specific provisions, has shown flexibility—particularly around SALT and middle-class relief—suggesting that not all TCJA features are off-limits for reform.
Conclusion: Your Taxes, Your Future
The expiration of the TCJA provisions sets the stage for a high-stakes policy shift in 2025. Whether the country leans toward Trump’s aggressive tax cuts or Harris’s targeted relief and balanced budgeting will ultimately affect how much individuals and businesses pay—and what services the government can afford. One thing’s for sure: this isn’t just a tax debate; it’s a defining moment for the American economy.
