It seems like almost every presidential candidate is promising to change the tax code in some way. But this year’s campaign promises are truly revolutionary.
Most of the tough tax proposals are from Republican Donald Trump. But Democratic nominee Kamala Harris is also planning a few big shifts in her direction.
Here are some tough ways Trump and Harris are promising to change taxes.
Making car loan interest fully tax deductible
The applicant proposed this change: Trump
In an October 10 speech to the Detroit Economic Club, Trump promised to “make the interest on auto loans completely deductible.” He told the Motor City audience:
“That will bring about changes in your industry. This will spur greater domestic auto production and make car ownership more affordable for millions and millions of working American families. This is an amazing thing, if I do say so myself.”
This may sound big, but it’s actually just a throwback to the past. All interest expenses — including interest related to car loans and credit cards — were deductible until the Tax Reform Act of 1986.
To eliminate double taxation for Americans abroad
The applicant proposed this change: Trump
As it stands today, an American living abroad may end up paying taxes twice – in the country where the person currently lives and in the US America is one of the very few countries in the world that taxes its citizens. this way, but Trump promises to change that.
A day before his Detroit speech, Trump told the Wall Street Journal that he plans to end double taxation for US citizens living abroad. He also released a YouTube video in which he promised to make such taxes a thing of the past before asking for the votes of Americans abroad:
“I am about to completely eliminate double taxation for overseas citizens. You’ve been asking for this for years, and no one has listened to you, and you deserve it, and I will. It’s the right thing to do, and no American leader has ever been willing to stand up and commit to you the way I have committed to so many things, but this is a very important aspect of your safety, your security and, frankly, your wallet. . But I’m not like everyone else. I do things. When I say, I do things. So I will do this for you. It’s great, it eliminates double taxation, and you’ll be very happy if I come back and do it for you. So I need you to get out and vote. Cast your vote today.”
Eliminate taxes overtime
The applicant proposed this change: Trump
At a September 13 rally in Arizona, Trump promised to end overtime taxes:
“As part of the additional tax reduction, we will eliminate all taxes overtime. Do you know what that means? Overtime workers are among the hardest working citizens of our state, and for too long no one in Washington has cared about them. It’s time for the working man and woman to finally take a break, and that’s what we’re doing.”
After Trump’s announcement, the Tax Foundation weighed in, saying the measure would “significantly distort labor market decisions” by encouraging workers to work overtime, which could increase labor costs.
The foundation added that workers are likely to enter tax-free hourly or salaried jobs unless the benefit of tax-free overtime can be transferred to salaried workers who do not pay federal overtime laws.
Eliminate taxes on Social Security benefits
The applicant proposed this change: Trump
One of Trump’s most controversial ideas has been his promise to eliminate all taxes on Social Security benefits. Trump announced the intention on his social media platform, Truth Social, in July:
“THE BIG ONES SHOULD NOT PAY TAXES TO THE COMMUNITY!”
While this may sound good to Social Security recipients, the proposal stands to hurt the Social Security program in the long run, as he explains in “3 Surprising Ways Trump Sounds ‘Blue’ – and 3 Ways Harris Appears ‘Red’.”
Eliminate taxes on tips
The applicant proposed this change: Both Trump and Harris
Trump was the first to announce his intention to end the tax on employee tips. He also included a promise to “… eliminate Tip Taxes for millions of Restaurant and Hospitality Workers …” in his written campaign post. The concept received immediate blowback.
When Harris entered the race, he surprised many by embracing the idea of ending the tip tax. He even added similar words to his post, promising to “… eliminate the tax on tips for service and hospitality workers.”
Both candidates have publicly announced their proposals for tax-free tips in Nevada, a key battleground state and one where the hospitality industry — and tipping — are large parts of the economy.
Creating a ‘minimum billion tax’
The applicant proposed this change: Harris
Income inequality is growing in America, but Harris hopes to help reverse that trend by taxing billionaires less.
While he hasn’t provided details about the proposal, his website says the following about Harris and his vice president, Gov. Minnesota’s Tim Walz:
“They’re going to make sure that the wealthiest Americans and big corporations pay their fair share, so we can take action to build the middle class while reducing the deficit. This includes … making a minimum tax of a billion…”
What does it mean to you?
While it’s common for presidential candidates to make tax-related promises, it’s rare for presidents to make good on them. Federal taxes are a matter of federal law, and changes in federal law can only be initiated by Congress.
This means it would be difficult if not impossible for Trump to follow through on his tax proposals unless the Senate and House of Representatives are both controlled by Republicans in 2025. And it would be difficult if not impossible for Harris to keep track of his taxes. proposals unless both chambers of Congress are controlled by Democrats.
In short, don’t put too much hope in any presidential candidate to deliver on tax-related promises.
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