Donald Trump’s Tax Plan: The 2024 Election

On November 5, 2024, America will be electing a new president.

Whether it be a former president or a vice president, the day is rapidly approaching. With a vote coming up, the American citizens are reviewing each candidate’s tax plans closely. 

We previously reviewed the potential tax plans of Vice President Kamala Harris.

In this edition, we are going to outline what we know today about the tax ideals of the Republican nominee, former President Donald Trump.

Tax Cuts and Jobs Act

On December 2022, 2017, Trump signed the Tax Cuts and Jobs Act into law.

With this law came numerous tax provisions. The Tax Cuts and Jobs Act is expiring in 2025, making it a point of interest during this election. 

At a private dinner in June, Trump allegedly told attendees that in his second term, he would be extending these cuts.

The extensions of these provisions would mean a potential return to bonus depreciation — crucial for real estate investors, an extension to the QBI deduction, an extension of capital gain deferral from opportunity zones, a reduction to the standard deduction, cutting the estate tax in half, and many other far-reaching adjustments. 

Trump’s Corporate Tax

While the Tax Cuts and Jobs Act lowered the corporate tax rate from 35% to 21%, with a promise to win the hearts of CEOs everywhere, Trump has pledged to reduce the corporate tax even more to 15%.

This change would incentivize more American-made products and push more business opportunities. However, the effect on the US debt would be substantial.

“No Tax on Tips”

Who knew that tips would be the buzzword of the 2024 election?

In an interesting turn of events, one of the most discussed plans is Trump’s pledge on the campaign trail to remove the taxes on tips for service workers.

This was followed by a pledge from Vice President Kamala Harris to do the same.

Service workers may benefit from this change, but many are looking at the bigger topic of raising their base wages. 

“No Tax on Overtime”

Post his first and potentially only debate with VP Harris on September 10, Former President Trump announced on September 13 that if elected, he would put efforts behind ending taxes on overtime.

He stated at his rally in Tucson, Arizona, “Today, I’m also announcing that as part of our additional tax cuts, we will end all taxes on overtime. You know what that means? Think of that. That gives people more of an incentive to work. It gives the companies a lot, it’s a lot easier to get the people,”

Trump on Tariffs

In addition to tips and overtime, tariffs have been on Trump’s mind.

Former President Trump has proposed a radical change to the federal income tax system by replacing it with tariffs.

This idea involves scrapping federal income tax, which currently generates significantly more revenue than tariffs. 

To match the revenue from income tax, tariffs would need to increase substantially.

Historically, tariffs were a primary revenue source when federal spending was much lower.

Today, higher tariffs could lead to increased costs for American businesses and consumers, potentially reducing production and employment.

While the proposal aims to reduce tax burdens and protect domestic industries, it also presents challenges such as a revenue gap, higher consumer costs, and potential economic disruptions. 

Trump’s Plan for Social Security Tax

Recently, Trump posted on his social media platform, “Seniors should not pay tax on social security”. 

On August 7 at his press conference, he doubled down on this sentiment. 

If Trump is re-elected and eliminates taxes on social security for seniors, this also would be grave for the nation’s deficit. 

The Committee for a Responsible Federal Budget estimates that this change would increase the deficit by $1.6-$1.8 trillion by 2035. 

The Campaign Trail Continues

 A common theme in the former president’s tax plans is a boost in the economy and public favor at the expense of a substantial increase in the national debt.

When reviewing both candidate’s policies, plans, and pledges, it’s important to consider the potential impacts and determine what matters most to you as a voter.

On November 15, our post-election coverage kicks off at our Year-End Tax Impact virtual event.

Experts will break down the results and the impact on your real estate and taxes.

Register for free today.