icon
icon
icon
icon
Upgrade
icon

2024 Election: Trump vs. Harris on Corporate Tax Rates

AInvestTuesday, Nov 5, 2024 7:02 pm ET
1min read
The 2024 U.S. presidential election is shaping up to be a pivotal moment for corporate America, with starkly different tax proposals from former President Donald Trump and Vice President Kamala Harris. Both candidates have outlined ambitious plans that could significantly reshape the corporate tax landscape, with profound implications for business strategy, investment decisions, and global competitiveness.


Trump's Tax Plan: A Double-Edged Sword
Trump's tax plan centers around a significant reduction in the corporate tax rate, lowering it from 21% to 15%. This proposal, if enacted, would rank as the sixth-biggest tax cut since 1940, according to the Tax Foundation. The plan also includes a restoration of the Domestic Production Activities Deduction (DPAD) set at 28.5%, aiming to achieve a 15% effective corporate tax rate for domestic production. However, Trump's plan is not without its controversies. His proposed universal 20% tariff on all imports, plus a 60% tariff on Chinese goods, could shrink U.S. GDP by about 1.3% and trigger retaliatory measures from trading partners, potentially offsetting the economic benefit of his tax cuts.

Harris's Tax Plan: A Balanced Approach
Harris's tax plan, on the other hand, takes a more balanced approach, focusing on targeted tax increases for high-income individuals and businesses, while expanding tax credits and incentives for low- and middle-income households. Her proposals include increasing the corporate tax rate to 28% and boosting the corporate alternative minimum tax from 15% to 21%. Harris also plans to quadruple the stock buyback tax from 1% to 4% and expand the Child Tax Credit (CTC) to $6,000 for children up to a year old, $3,600 for kids between 1 to 6, and $3,000 for those between 6 to 17. The Tax Foundation estimates that Harris's plan would raise about $1.7 trillion over 10 years on a conventional basis, after factoring in various credits and tax cuts.


Navigating the Crossroads
Corporate America stands at a crossroads, with two radically different tax policy directions on the table. Trump's plan, while offering significant tax cuts, comes with the risk of trade disruptions and potential job losses due to tariffs. Harris's plan, though more modest in its tax cuts, focuses on targeted tax increases and expanded credits, aiming to address income inequality and support low- and middle-income households. As the 2024 election approaches, businesses must carefully consider the implications of each candidate's tax proposals and prepare for the potential shifts in the corporate tax landscape.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.