As the November election approaches, President Joe Biden and former President Donald Trump are offering two very different tax policies for the American people when one of them steps into the Oval Office in late January 2025.
If elected, Trump would uphold his 2017 Tax Cuts and Jobs Act, which features a corporate tax rate of 21% and lower taxes for individuals that dropped the tax rate for top earners from 39.6% to 37%.
The policy, which will expire in 2025, also nearly doubled standard deductions to $14,600 for single filers to $29,200 for married filers, FOX Business reported.
If Biden stays in office for a second term, he said he would let Trump’s tax cuts for the wealthy expire, while holding onto reductions for those making less than $400,000.
Biden also proposes returning the top individual income tax rate from 37% to 39.6%, implementing a 25% minimum tax rate on households worth more than $100 million and increasing the capital gains tax rate.
His policy also includes quadrupling the corporate stock buyback tax to 4%, raising the corporate tax rate to 28% and boosting the Medicare tax paid by wealthy Americans.
During Thursday’s presidential debate, Trump heralded his tax plan as creating the greatest economy the U.S. has ever seen before the COVID-19 pandemic, while Biden criticized it as a $2 trillion tax policy that benefited the very wealthy.
“What I'm going to do is fix the tax system,” Biden said during the debate, according to a CNN transcript.
Biden also knocked Trump’s proposed 10% tariff on all imports, saying it would cost the average American at least $2,500 a year as a result in higher prices for food and other goods.
Price Action: Stocks and exchange-traded funds in the tax-preparation and financial sectors, both of which can be sensitive to tax-policy changes, gave mixed reactions on Friday to the proposals being offered by Biden and Trump.
H&R Block Inc. (NYSE:HRB) gained 0.67% to reach $53.89 by late-afternoon trading on Friday, while Intuit Inc. (NASDAQ:INTU) edged up 0.90% to $567.30 and Morgan Stanley (NYSE:MS) improved 0.77% to $96.51.
Shares U.S. Financials ETF (NYSE:IYF) ticked up 0.27%, but Vanguard Consumer Staples ETF (NYSE:VDC) fell 0.55% in the late afternoon and Utilities Select Sector SPDR Fund (NYSE:XLU) dipped 1.28%.
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