2024 Election: Donald Trump Tax Plan

If Donald Trump becomes President again, his tax plan is expected to be a cornerstone of his economic agenda, drawing from his previous tenure while promising new initiatives tailored to the current fiscal environment. Here’s a breakdown of what his tax policies might look like and their potential impact.

1. Tax Cuts 2.0: Lowering Individual and Corporate Tax Rates

During his 2017 presidency, Trump signed into law the Tax Cuts and Jobs Act (TCJA), which significantly lowered the corporate tax rate from 35% to 21% and adjusted individual income tax brackets. If re-elected, Trump may push for a second round of tax cuts, which some have dubbed "Tax Cuts 2.0." This version would likely aim to make the individual tax cuts permanent (they are set to expire in 2025) and reduce the corporate tax rate even further—potentially down to 15%.

2. Revisiting the Wealth Tax and Capital Gains

Trump’s previous tax cuts were criticized for favoring the wealthy, and he may continue with policies that lower capital gains tax rates, potentially aligning them with regular income tax rates. Trump has also floated the idea of cutting the top capital gains tax rate to 15% from its current 20%, claiming it would spur investment and boost the stock market.

3. Middle-Class Tax Relief: Exploring a 10% Cut

To broaden his appeal to middle-class voters, Trump may propose a specific 10% tax cut for middle-income families. This proposal was suggested near the end of his first term but never came to fruition. The structure of such a cut remains unclear, but it would likely target those earning between $50,000 and $150,000 per year.

4. Simplification and the Elimination of Loopholes

Trump has long promised to simplify the tax code, aiming to reduce loopholes and special-interest deductions. While the TCJA eliminated some itemized deductions and capped others, Trump may focus on further reducing the complexity of the tax code, potentially offering a higher standard deduction.

5. Estate Tax Elimination

One of Trump’s key priorities may be to eliminate the estate tax entirely. During his first term, the exemption was raised significantly, shielding many wealthy estates from paying taxes upon death. An elimination of the estate tax would align with Trump’s broader policy of reducing taxes on investments and wealth transfers.

6. Opportunity Zones Expansion

Trump is also likely to expand his signature Opportunity Zones program, which offers tax incentives for investments in economically distressed areas. If re-elected, he could push for a broader range of tax credits and deductions for businesses that invest in these zones.

Potential Challenges and Criticisms

If Trump wins the presidency again, passing these tax initiatives through Congress could be challenging, especially if the political landscape remains divided. Moreover, critics are likely to highlight the potential impact on the federal deficit, which has ballooned in recent years. Some economists argue that further tax cuts, particularly for the wealthy and corporations, could lead to more revenue shortfalls and underfunded social programs.

Final Thoughts

Trump’s tax plan is likely to follow a familiar pattern of reducing taxes for individuals and corporations while offering targeted incentives to spur investment and growth. While supporters believe these policies could drive economic growth and job creation, detractors worry they could worsen wealth inequality and fiscal imbalances.

If you have any questions on how Donald Trump's tax changes could affect you or your business, then please call Turner Business Solutions at (316) 281-0125 or schedule a free consultation online