2020 Election Tax Plans |
Provision | Current Law | Trump Proposals | Biden Proposals |
INDIVIDUAL | | | |
Income Tax Brackets | Top tax rate 37% for individual single taxpayers with incomes greater than $518,400 ($622,050 for married couples filing jointly) TCJA tax bracket changes expire after 2025 | Save an unspecified group of middle class taxpayers 10% possibly through rate reductions Make expiring lower rates permanent. Make expiring TCJA provisions permanent | Increase the top individual tax rate to 39.6% from 37% for those with income more than $400,000 |
Deductions | 2020 basic standard deduction $12,400 for single filers and married filers filing separately, $24,800 for married filers filing jointly and $18,650 for heads of household for 2020. 2021 deductions $12,550 for single/married filing separately, $25,550 for married filing jointly, and $18,800 for heads of household Personal exemption and most individual deductions suspended through 2025. State and local taxes (SALT) deduction capped at $10,000. | Extend the higher basic standard deduction and other deductions enacted by the TCJA that are scheduled to expire after 2025 Make expiring TCJA provisions permanent | Limit the benefit of itemized deductions to 28% Restore Pease limitation on itemized deductions taxpayers with income above $400,000 |
Capital Gains & Net Investment Income Tax (NIIT) | Top tax rate for capital gains and qualified dividends 20% for income over $441,450 for individuals and $496,600 for married couples filing jointly 3.8% NIIT | Would consider indexing capital gains for inflation Cut maximum capital gains rate to 15% | Increase the top marginal income tax rate on long-term capital gains to 39.6% for taxpayers with income over $1 million annually Retain the NIIT |
Estate & Gift Tax | For 2020, the exempt amount for estate and gift taxes is $11.58 million. After 2025, this amount is scheduled to revert to the pre-TCJA indexed amount of approximately $5.8 million Transfers of appreciated property at death get a “step-up in basis” | Make expiring TCJA provisions permanent | Eliminate step-up in basis rule that allows people to pass capital gains to heirs without tax after death Return exemptions and maximum rates to 2009 levels. Exemption to $3.5 million for individual and $7 million for married couple. Maximum rate increased to 45% |
BUSINESSES | | | |
Corporate Tax Rate | 21% Rate | No change | Increase to 28% Impose a new corporate minimum tax on corporations with book income over $100 million Impose a tax penalty on corporations that ship jobs overseas in order to sell products back to America |
QBI | Taxpayers other than C corporations generally are allowed to deduct 20% of QBI from a partnership, S corporation, or sole proprietorship, as well as 20% of qualified REIT dividends and qualified publicly traded partnership income | No change | Phase out QBI deduction for taxpayers with income over $400,000 |