The upcoming presidential election could hold long-term implications for tax reform, no matter which candidate wins. While neither campaign has released a detailed tax plan on the campaign trail, former Vice President Biden has proposed high-level policies familiar of the Obama era, and an abrupt departure from the Tax Cuts and Jobs Act (TCJA) measures put into place in 2017. The broad changes Vice President Biden has projected would include increasing taxes for higher income individuals and certain businesses in an effort to use the increased tax revenues to provide targeted relief for lower and moderate-income individuals and fund incentives for domestic manufacturing and increased infrastructure spending. This approach redistributes the tax burden by calling for higher taxes on realized income (from wages and capital gains) and on the value of an individual’s estate at death.
In contrast, President Trump proposes to make permanent the 2017 individual TJCA tax reform provisions that are set to expire after 2025. This includes proposing additional tax cuts for middle income individuals and businesses while potentially lowering the current 21 percent corporate income tax rate. In addition, he plans to make permanent the temporary provision addressing estates and passthrough entities.
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Bennett Thrasher will continue to monitor developments with the current candidates’ tax proposals and will communicate any significant changes that will impact our clients. For further questions or guidance regarding tax planning, please contact your BT tax advisor by calling 770.396.2200.