4 Tax Issues You Must Understand Before Voting

Millions of Americans are expecting action when it comes to their taxes from whoever secures the White House in November. That's why Donald Trump and Kamala Harris have been talking about that issue and others related to the economy on the campaign trail.

While their ideas may have similarities, it's clear that the candidates have quite different ideas on how to steer the future of the American economy. You may want to understand their policies to prepare yourself financially.

Here's a look at some things you should know about both candidates when it comes to taxes and where they stand on tax cuts and increases.

It's important to note that the next president faces trillions of dollars in expiring tax breaks. Those were enacted by Trump through the Tax Cuts and Jobs Act (TCJA) of 2017. Per the Tax Foundation, more than 60% of taxpayers could see higher taxes in 2026 if there's no extension.

As voters wait on both presidential candidates to unveil more details on their economic agendas, Trump and Harris are calling for tax changes that could impact millions of people in the United States. Both have proposed tax cuts and increases that would require congressional approval.

It may be no surprise that Trump plans to preserve at least some of the individual and business tax cuts put in place via his TCJA. According to the Trump campaign, those tax cuts benefited millions of Americans and can help the millions of people who are dealing with the impacts of inflation and higher prices.

The campaign said the individual tax cuts and business tax reforms would help spur economic growth and confront higher costs of living without inflationary government spending.

Though Harris herself may not have directly addressed TCJA extensions so far on the campaign trail, there has been some Democratic support. In fact, President Joe Biden's top economic advisor voiced support for partial extensions. According to the Tax Foundation, Harris has a record of favoring steeper tax hikes on businesses and people than President Biden.

Trump and Harris have both said they will address the budget deficit. They have both proposed plans to raise revenue. Again, keep in mind tax law changes require approval by Congress.

According to the Harris campaign, she will push to increase the corporate tax rate to 28%, up from the 21% put in place through the TCJA. That could potentially reduce the deficit by $1.3 trillion over a decade, according to the Treasury Department.

She also proposes to raise taxes on high-income people, raising the top marginal income rate to 39.6% from 37%. She also proposes taxing investment gains of $1 million or more at the ordinary income rate instead of the lower capital gains rate.

In a pitch that seems to find great support from his base, Trump has called for sweeping tariffs, which are taxes levied on imported goods. Further, the former president suggested he's looking at putting in place a policy of tariffs that would lead to the elimination of the federal income tax.

While voters may favor the idea of that elimination, they could be forced to pay more for goods and services with companies being forced to pay tariffs. Experts say the tariffs put in place during his administration contributed to higher costs for consumers and a loss of jobs.

The Trump and Harris campaigns have both talked about the idea of eliminating income tax on tip income. Trump made the proposal well before Harris. In fact, his pitch drew a mixed reaction.

The former president has also called for no taxes on Social Security income. Social Security has been a hot issue this election season amid fears of the finances for the program and related ones.

In a more recent move, Harris also talked about the idea of eliminating taxes on tip income. She said it's part of her commitment to fight for working families, which she said also includes a plan to raise the minimum wage.

As you might expect, with both candidates standing behind the idea of cutting taxes on tip income, it has some bipartisan support in Congress.

With both candidates talking about their plans to help working American families, it may be no surprise that the campaigns have discussed expanding the Child Tax Credit. In fact, Harris announced an economic plan that includes an expanded Child Tax Credit worth up to $6,000 in total tax relief for families with newborns.

After Sen. JD Vance of Ohio, Trump's GOP running mate, talked about a $5,000 Child Tax Credit, the campaign said the former president would consider a significant expansion of the Child Tax Credit for American families.

As the November general election approaches, both presidential candidates have been talking about the economy and their plans for taxes if they win. While Trump and Harris may both favor tax cuts on tip income, they have very different tax and economic agendas.

How their plans may affect your ability to get ahead financially is still largely unknown. Perhaps in the upcoming debate, the candidates may reveal more of their economic agendas and how their plans for taxes could impact you.