- Trump’s tax cuts and tariffs echo early U.S. policies, potentially shifting financial markets.
- Harris contrasts with Trump, targeting high-net-worth individuals for added revenue streams.
- Trump and Harris propose different approaches to provide tax relief for the middle class.
In an episode of “In the Know,” ARK Invest CEO Cathie Wood discussed how former President Donald Trump’s economic proposals could shape markets, drawing comparisons to early American economic strategies.
Wood pointed out that Trump’s ideas for eliminating income tax, adjusting duties, and modifying regulations may reflect some policies from the early days of the United States, potentially influencing the nation’s financial landscape if he were re-elected.
Trump’s Tax Policies: Cuts for Income and Corporate Taxes
Trump’s campaign has voiced support for continuing the 2017 tax cuts, including lowering the top tax rate from 39.6% to 37%, a reduction set to end in 2025.
Trump has also proposed removing the cap on state and local income tax deductions, a change analysts say would benefit higher earners, especially those in the top 10% income bracket.
Comparing Harris’s Tax Agenda for High Earners
Vice President Kamala Harris, by contrast, supports returning the top tax rate to 39.6% and has introduced a proposal to tax inactive gains at 25% for those with over $100 million in net assets. This policy is projected to generate around $516 billion over the next decade.
Read also: Unrealized Gains Tax: How Harris’s Plan Could Hit Crypto Wallets
Unlike Trump’s proposals, which would extend benefits for wealthier Americans, Harris’s plan would add new revenue sources targeting high-net-worth individuals.
Family Benefits: Contrasting Approaches
For family policies, Trump has pledged to continue the current $2,000 per child tax credit, with his running mate, Sen. JD Vance, supporting an increase to that amount.
Harris has proposed a more extensive plan, including a $6,000 tax credit for newborns, $3,600 per child annually for those under six, and $3,000 per child for those under 18. This proposal, a reinstatement of previous Biden administration provisions, is projected to cost $1.5 trillion over a decade.
For middle-income earners, Trump aims to reduce taxes by offering exemptions for tips and overtime pay, with an estimated cost of $107 billion and $866 billion over ten years. Harris has also suggested tax relief on tips but limits it to leisure and hospitality sectors, with an estimated cost of $62 billion over the same period.
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