Tax and Economic Policy
Tax and Economy – Presidential Positions
Donald Trump
- Trump has made his top tax priority cementing his legacy of the Tax Cuts and Jobs Act of 2017 (TCJA, Pub. L. 115-97), by extending or making permanent the tax-rate reductions, including the 20% passthrough deduction and expanded estate-tax exclusion.
- Trump has also proposed reducing the TCJA-enacted 21% corporate tax rate to 20% and further reducing the rate to 15% for domestic manufacturers.
- On the campaign trail, Trump has proposed numerous tax-policy
initiatives, including:
- Eliminating federal taxation of tip income;
- Eliminating federal taxation of overtime pay;
- Eliminating the taxation of Social Security benefits;
- Eliminating double taxation for Americans living abroad;
- Restoring the deductibility of the state and local tax (SALT);
- Creating a tax credit for family caregivers;
- Allowing a tax deduction on auto-loan interest; and
- Permitting individuals to write off the cost of generators for natural disaster mitigation.
- Trump has also expressed interest in increased taxation of university endowments.
- To offset the cost of extending the TCJA's tax provisions, Trump has suggested imposing a 10%–20% baseline tariff on all imports, with a 60% tariff on imports from China.
- Trump has criticized the Inflation Reduction Act (Pub. L. 117-169) and called for the repeal of several of its energy-tax credits, particularly its tax credits for electric vehicles.
Tax and Economy – VP Positions
JD Vance
- Vance has become one of Trump's fiercest allies, despite once being a critic, and he can be expected to broadly endorse Trump's tax-policy positions.
- Vance has been particularly active on proposals concerning the taxation of university endowments, especially during his tenure in the Senate. He introduced bills like the College Endowment Accountability Act (S. 3514), which would increase the excise tax from 1.4% to 35% on private university endowments with assets of at least $10 billion.
- Vance also has shown populist tax views that may counter conventional Republican positions. With regard to corporate taxation, Vance cosponsored the Stop Subsidizing Giant Mergers Act (S. 4011) with Sen. Sheldon Whitehouse (D-RI), which targets large corporate mergers by treating reorganizations as taxable events if the acquirer and acquired company both have over $500 million in gross receipts.
- Vance holds protectionist views concerning clean energy tax credits: he introduced the Drive American Act (S. 2962), which would eliminate over $100 billion in existing EV subsidies and replace them with the "America First Vehicle Credit," a credit of up to $7,500 for new gas- or diesel-powered vehicles.
- On the campaign trail, Vance called for raising the federal child tax credit to $5,000 as part of his emphasis on a "pro-family" policy.
Tax and Economy – Other Considerations
Congressional
- Republicans will move to extend TCJA tax provisions, protecting or further reducing tax rates across the board for individuals and businesses.
- Individual provisions will likely include an extension of the TCJA's decreased income tax rates, expanded tax brackets and the expanded standard deduction.
- Business provisions will likely include an extension of the TCJA's immediate expensing of research and development costs; 100% bonus depreciation; and the 30% business interest limitation based on earnings before interest, taxes, depreciation and amortization (EBITDA).
- Republicans will engage in coordinated efforts to make permanent or extend the Section 199A deduction for pass-through businesses.
- There will be significant consideration of tariffs and spending cuts as a pay-for to extend the TCJA. However, a consensus on an overall 2025 tax bill, including the extent to which offsets will be included, has yet to emerge within the Republican Conference, beyond extension or permanence of the TCJA.
Agency
- Republicans will look to repeal or scale back several Inflation Reduction Act energy-tax credits and Treasury Department rulemakings, particularly with regard to electric vehicles credits, bonus credits (e.g., energy communities) and the advanced manufacturing credit (section 45X).
- Republicans will scale back recent expansions of IRS funding, including potentially ceasing the Direct File program.
Financial Services Policy
Financial Services – Presidential Positions
Donald Trump
- Trump stated that he would seek to impose a 10% cap on credit card interest rates if elected.
- In previous campaigns, Trump promised to repeal the Dodd-Frank Act and reduce burdensome, anti-growth regulations.
- During his first term, Trump issued an Executive Order (EO) outlining his "Core Principles for Regulating the United States Financial System." The principles include empowering Americans to make financial decisions and requiring more rigorous regulatory impact analysis of proposed financial regulations.
- Trump also issued an EO requiring that agencies rescind two federal regulations for every newly created regulation.
- Trump has assumed a pro-cryptocurrency position on the campaign trail, a reversal from his stance on digital assets as president.
- He has repeatedly opposed ESG initiatives, vowing to end the Securities and Exchange Commission's (SEC) climate rule and issue an executive order to limit employer offerings of ESG funds in retirement plans.
Financial Services – VP Positions
JD Vance
- Vance teamed up with Sen. Elizabeth Warren (D-MA) to criticize the FDIC's sale of First Republic Bank to JPMorgan Chase, citing banking consolidation concerns. They also partnered on the Failed Bank Executives Clawback Act, which would penalize bank executives when their institutions fail.
- He cosponsored the Credit Card Competition Act, a controversial bill that has received broad criticism from the financial services industry.
- He circulated draft legislation that would create a regulatory framework for digital assets.
- Vance led a letter urging the Consumer Financial Protection Bureau (CFPB) and Department of Justice (DOJ) to rescind guidance warning banks against using immigration status as part of a loan application.
- Vance voiced support for Federal Trade Commission (FTC) Chairwoman Lina Khan's antitrust enforcement efforts.
- He sponsored a bill that would insure all deposits in accounts used for payroll and related purposes at banks with less than $225 billion assets, as well as all credit unions.
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