As the 2024 presidential campaign heats up, candidates Kamala Harris and Donald Trump have put forward contrasting tax proposals that could have significant implications for American taxpayers. A recent analysis by the Institute on Taxation and Economic Policy (ITEP) has shed light on the distributional impacts of these proposals, revealing stark differences in how each candidate’s plan would affect different income groups.
According to the analysis, Harris’ tax proposals would, on average, result in a tax cut for all income groups except the richest 1 percent of Americans. In contrast, Trump’s proposals would lead to a tax increase for all income groups except the richest 5 percent. This highlights a fundamental difference in the tax philosophies of the two candidates, with Harris prioritizing tax relief for middle and lower-income Americans, while Trump’s plan appears to benefit the wealthiest individuals.
In terms of specific impacts, if Harris’ proposals were implemented in 2026, the middle fifth of Americans would see an average tax cut of 2.7 percent of their income, with the poorest fifth receiving a tax cut of 7 percent. On the other hand, under Trump’s plan, the middle fifth would face a tax increase of 2.1 percent, and the poorest fifth would see a hike of 4.8 percent. The richest 1 percent would experience an average tax increase of 4.1 percent under Harris, while Trump’s plan would result in a tax cut of 1.2 percent for this group.
The analysis also highlights the significant differences in average tax changes between the two candidates’ plans. For example, the middle fifth of Americans would receive an average tax cut of $1,980 under Harris’ plan, compared to an average tax increase of $1,530 under Trump’s plan. Similarly, the bottom fifth of Americans would see an average tax cut of $1,130 under Harris, but an increase of $790 under Trump. The top 1 percent would face an average tax increase of $121,460 under Harris, while Trump’s plan would result in a tax cut of $36,320 for this group.
Delving into the specifics of each candidate’s tax plan, Harris’ proposals include extending temporary provisions in the 2017 Trump tax law for those with incomes below $400,000, reforming taxes that fund Medicare, scaling back tax breaks on capital gains and dividends for high-income earners, and reforming the corporate tax code to address income and racial inequality. On the other hand, Trump’s plan includes extending temporary provisions in his 2017 tax law, exempting certain types of income from taxes, reducing the corporate tax rate, repealing tax credits for green energy, and imposing tariffs on imported goods.
Overall, the analysis provides valuable insights into how the tax policies of Harris and Trump would impact different income groups in America. As voters consider their choices in the upcoming election, understanding these distributional impacts is crucial in evaluating the potential economic consequences of each candidate’s tax proposals. For more detailed information on the impact of either candidate’s tax plan, readers can refer to the ITEP analysis for a comprehensive breakdown of the data.
