The Differences Between the Trump and Biden Tax Plan

Maintain 21%

Raise to 28%

Impose a 15% minimum tax on book income so no corporation gets away with paying no taxes

Make 20% qualified business income pass-through deduction permanent

Phase out 20% qualified business income pass-through deduction for taxpayers earning more than $400,000

Make 100% bonus depreciation permanent

“Made in America” Tax Credits

Expand Opportunity Zones

Double tax rate on Global Intangible Low Tax Income (GILTI) earned by foreign subsidiaries of US firms from 10.5% to 21%

Establish a Manufacturing Communities Tax Credit to reduce the tax liability of businesses that experience workforce layoffs or a major government institution closure

Expand the New Markets Tax Credit and make it permanent

Offer tax credits to small businesses for adopting retirement savings plans

Expand renewable energy-related tax credits, including tax credits for carbon capture, use, and storage as well as credits for residential energy efficiency, and a restoration of the Energy Investment Tax Credit (ITC) and the Electric Vehicle Tax Credit

Impose a 10% surtax on corporations that “offshore manufacturing and service jobs to foreign nations in order to sell goods or provide services back to the “American market” 

Establish an advanceable 10% “Made in America” tax credit for activities that restore production, revitalize existing closed or closing facilities, retool facilities to advance manufacturing employment, or expand manufacturing payroll

Under the current plan, the 12.4% payroll tax is divided evenly between employers and employees and applies to the first $137,700 of an individual’s income

*Trump issued an executive order to temporarily postpone social security tax for employees from Sept. 1 through Dec. 31, 2020. He has indicated he would make this temporary reprieve permanent

Maintain the 12.4% tax split and the $137,700 cap but apply the Social Security payroll tax on earnings over $400,000

Repeal renewable energy investment credit

Eliminate accelerated depreciation for renewable energy property

Reform and extend incentives that generate energy efficiency and clean energy jobs

Incentives for carbon capture technology

Incentives for manufacturing facilities making energy-efficient upgrades

Maintain 37% and make it permanent

No limit on itemized deductions

10% “Middle Class” tax cut

Reduce 22% tax bracket to 15%

Raise to 39.6%

Cap value of itemized tax deductions at 28% for taxpayers earning more than $400,000

Maintain maximum capital gains rate at 20%, and maybe lower to 15%

39.6% on income above $1M

Maintain current “step-up” in asset value and make permanent

Eliminate “step-up” basis for inherited capital assets

Restore estate tax rates to “historic norms”

Eliminate credits for electric vehicles

Repeal residential energy efficient property credit

Restore full electric vehicle credit

Reinstate tax credits for residential energy efficiency

Maintain $3,000 tax credit for one person; $6,000 tax credit for one or more

Increase credit to $8,000 for one person; $16,000 for two or more

Maintain $2,000 tax credit, which $1400 of this credit is refundable, for each child 16 or under, and $500 for dependents other than children 16 or under

Increase credit to $3,000 for each child ages 6 to 17, and $3,600 for children under 6, making it refundable and advanceable during the Coronavirus crisis

N/A

Refundable, advanceable tax credit of up to $15,000

Provide a tax credit for individual and corporate donations to state-authorized organizations that sponsor scholarships

Exclude forgiven student loan debt from taxable income

Credit up to $4,000 ($8,000 for married couples filing a joint return), plus an additional $500 for each child age 16 or younger for travel-related expenses within the U.S.

N/A