As a seasoned tax attorney, I’ve been closely following the tax policies of President Biden and former President Trump. Recently, an article caught my attention that provides a comprehensive comparison of their fiscal strategies. Let’s dissect the key points.
President Biden’s fiscal 2025 tax and spending blueprint is essentially a political statement, focusing on raising taxes on the wealthy and businesses to fund federal support for child care, health care, and housing. Despite the unlikelihood of these proposals becoming law, they serve as a reminder of how another four years of Biden in the White House would differ from a second term for GOP nominee Donald Trump, especially in the area of taxes.
Biden’s tax plan is touted as fairer and more fiscally responsible than Trump’s. However, it doesn’t address the country’s unsustainable budgetary path. The tax cuts pushed through by a Republican Congress and Trump in late 2017 are set to expire at the end of 2025, except for the corporate tax-rate cut. This looming deadline will force the next administration to prevent a sudden reversion to pre-2018 law, which would lead to mixed results in terms of equity and efficiency.
Trump favors extending the entire law, estimated to cost $3.3 trillion over the next decade, with no realistic plan to pay for it. Biden, on the other hand, proposes raising taxes on wealthier Americans and corporations. His proposal includes lifting the corporate rate to 28% from the current 21%, hiking the corporate stock buyback tax, and implementing a minimum 25% tax on families with more than $100 million in wealth.
While Biden’s approach is more fiscally responsible, his insistence on not raising taxes on individuals earning under $400,000 a year is problematic. This income level doesn’t define the middle class and exempts all but 1 or 2% of taxpayers, including the entire upper middle class, from any new responsibility for helping the government pay its bills.
Despite these shortcomings, it’s heartening that Biden is mindful of the national debt. His budget would shave about $3 trillion off the deficit over the next decade. However, the deficit is still set to grow $16 trillion in that time frame. Both Biden and Trump are committed to the unrealistic promise of leaving Social Security and Medicare untouched.
As we approach the next election, voters will need to consider the actual economic policy each candidate supports. On taxes, Biden has the better, if far from ideal, approach. It’s crucial for us to understand these policies and their implications to make informed decisions.