The $2.3T Gap Between Trump’s and Harris’s Tax Plans | WSJ

- [Narrator] Donald Trump's and Kamala Harris's tax policies are on completely different tracks. - I will pass gigantic tax cuts for workers and keep their jobs here in the United States. - Billionaires and big corporations must pay their fair share in tax.

(audience applauding) - Trump has a whole range of tax cuts that he's looking to implement, and he's proposing to raise tariffs significantly, which could help cover some of those costs. Harris, on the other hand, has a bunch of tax cuts and then is proposing trillions of dollars of tax increases, mostly on corporations and high income households, but they're running in different directions, reshaping who pays taxes in America. - [Narrator] On one track, Trump has proposed roughly $2 trillion more in tax cuts than Harris and would impose major tariffs on imported goods, which could help pay for those cuts.

On the opposite track, Harris would cut taxes for households that make under $400,000 and would raise taxes on corporations and the rich. This is how Trump's plan could work. Trump is borrowing much of his tax policy plans from his previous stint in the White House.

He wants to extend the tax cuts he signed into law in 2017. The Tax Bill from 2017 made a number of changes, including lower tax rates and increased Standard Deduction and doubling the Child Tax Credit, but those changes for households are set to expire at the end of 2025. The tax cuts Trump has proposed on the 2024 campaign trail could come at a heavy cost more than $6.

5 trillion over 10 years. Extending the tax cuts past 2025 could end up costing the federal government more than $4 trillion over a decade. Trump recently proposed a lower corporate tax rate of 15% that would only apply to companies that make products in the US, estimated to reduce federal revenue by $200 billion over the next decade.

- And a reduction in the corporate tax rate from 21% to 15% solely for companies that make their product in America. - [Narrator] Trump has suggested eliminating the income tax on Social Security benefits. In 2022 almost half of Social Security recipients paid those taxes.

- There will be no tax on Social Security. We're gonna stop it. (audience applauding) No tax on social Social Security.

- [Narrator] Ending income taxes on Social Security benefits could cost the federal government as much as $1. 8 trillion in revenue over a decade. by one estimate ending those taxes would cause the Social Security Fund to become insolvent one year earlier than previously forecast.

- This is a proposal that's really targeted to largely retirees and people, not very, very, very wealthy retirees, but people who are kind of well off enough to have some other source of income just besides Social Security. Harris is running in a different direction, cutting taxes on middle income families, lower income families, and raising taxes pretty sharply on high income households and on corporations. - [Narrator] Kamala Harris has largely adopted President Joe Biden's plan, which has fewer cuts compared to Trump's, costing about $4 trillion over 10 years.

The biggest chunk extending tax cuts for households making under $400,000 a year at an estimated cost of about $2. 8 trillion. One point of departure, Harris would go further to increase the Child's Tax Credit for young children.

- I'll not only restore that tax cut, but expand it. We will provide $6,000 in tax relief to families during the first year of a child's life, - As opposed to $3,600 under the Biden proposal and $2000 under current law. In some ways, you can think of it as covering some potential lost wages and for people who might have to take time off to care for a newborn.

- [Narrator] Harris also proposes an expanded credit of $3,600 for children under six and $3,000 for older children. Altogether, her Child Tax Credit Plan would cost $1. 2 trillion over the next decade.

Harris also announced a substantial first time home buyer tax credit as part of a larger plan to address housing affordability. - While we work on the housing shortage, my administration will provide first time home buyers with $25,000 to help (audience applauding) with the downpayment on a new home. - [Reporter] It's a $25,000 in down payment assistance, as opposed to $10,000, first time home buyer credit that President Biden had talked about, and that's roughly a $100 billion according to some estimates.

- [Narrator] To raise revenue, Trump's plan focuses on taxing imported goods, particularly from China. - We're going to have 10-20% tariffs on foreign countries that have been ripping us off for years. - Trump loves tariffs.

Tariffs basically are taxes on imported goods. The concern would be that middle income households use a greater share of their income to purchase imported goods than very high income households do. - [Narrator] Trump has also said he wants to repeal the Clean Energy Credits in the Inflation Reduction Act passed by Democrats in 2022.

- We're going to terminate his Green New Scam. It's gonna be terminated, and we're going to end this war on American energy. - I think Republicans generally are opposed to the electric vehicle tax credit.

Certainly the generosity of electric vehicle tax credits. - [Narrator] If Trump imposes a 10% across-the-board tariff and a 60% tariff on Chinese goods. - There's some estimates out there that suggest that over a decade it could get to three-ish trillion.

I think there's some squishiness in trying to figure out how much money could actually come in there. - [Narrator] Economists estimate Trump's tariffs would also raise the price of goods, costing $1,700 a year for the typical household. Harris's plan, on the other hand, veers away from tariffs and instead raises taxes on the top 3% of American households.

Harris's tax plan in line with Biden's most recent budget proposal would raise nearly $5 trillion in revenue. A big part of that plan is bringing the corporate rate up to 28%. - The Biden administration, which you know she's adopted their plans, has basically said, we don't want to extend any of those expiring tax cuts unless we pay for them.

- [Narrator] Harris's plan to raise taxes on households making over $400,000 would bring in about $1. 8 trillion in revenue. About a third would come from a new minimum income tax on people whose net worth is over $100 million.

- The biggest one and one that's most difficult to get through Congress is this idea of a minimum tax of at least 25% on the very top people, people who have at least a hundred million in net worth, and that basically taxes people based on their unrealized capital gains, their appreciated assets. Even with a full democratic control of Congress, that's gonna be difficult to sell. - [Narrator] Whoever wins the White House would also need their party to win the House and the Senate to keep their agendas on track.

- If you have Trump with a Republican House and a Republican Senate, then there's going to be tax cuts. - [Narrator] Facing the prospect of a divided government, where one party doesn't control the White House and Congress could cause either tax plan to go off the rails. - If everything expires at the end of 2025, there would be pretty sizable tax increases for most households.

About 60% of Americans would see tax increases. It's something that people will be talking about a lot if we even get close to December 31st, 2025, without a deal.