With the 2020 elections approaching, GMAG is tracking the tax plans of the presidential candidates. The chart below provides a summary of some of the key components of President Trump and Former Vice President Biden’s tax proposals.

TAX

Donald J. Trump &
Current Tax Law

Joseph Biden
INCOME TAX

Trump:

  • Discussion of extending the provisions of the Tax Cuts and Jobs Act

Current Law/TCJA:

  • Top marginal tax rate of 37%
  • $10,000 Cap on Salt Deduction
  • Elimination of many miscellaneous itemized deductions
  • Elimination of personal exemptions
  • Increase of the Standard Deduction (Currently $24,800)
  • 1031 exchanges limited to real estate only
  • Top marginal tax rate of 39.6% on income over $400,000
  • Long-term capital gain/qualified dividend rates of 39.6% for taxable incomes over $1M
  • Itemized deductions limited to 28% and restoration of itemized deduction limitations for taxable incomes above $400,000
  • Qualified Business Income deduction (199A) phased out for taxable incomes above $400,000
  • 1031 exchanges eliminated for taxable incomes over $400,000
  • New childcare tax credit of up to $8,000 per child
  • Expands the Earned Income Tax Credit
  • Renewable-energy related tax credits
  • Equalizing tax benefits of defined contribution plans (i.e. IRAs and 401ks)
  • Student loan forgiveness would not be taxable
ESTATE TAX

Current Law:

  • $11,580,000 gift/estate and generation-skipping exemption
  • Exemption returns to $5M, adjusted for inflation for 2026
  • Eliminate step-up in basis
  • Unclear if this change would result in capital gains tax on death or capital gains tax to heirs upon a sale of the asset
PAYROLL TAX

Trump:

  • Has supported a reduction in payroll taxes, but has not offered specifics

Current Law:

  • 6.2% Social Security Tax on wages up to $137,700
  • 1.45% Medicare tax on wages
  • 0.9% Additional medicare tax on wages above $200,000 single/$250,000 joint
  • Additional 12.4% social security tax on wage income over $400,000 evenly split between employees and employers.
  • There would be no additional tax on wages between $137,700 and $400,000.

 
CORPORATE TAX

Current Law:

  • Corporate tax rate of 21%
  • Global intangible low-tax income (GILTI) minimum rate of 10.5%
  • Corporate tax rate of 28%
  • 15% minimum corporate tax for companies with book profits over $100M
  • Global intangible low-tax income (GILTI) rate of 21%

Donald J. Trump
and Current 2020 Tax Law

INCOME TAX

Trump:

  • Discussion of extending the provisions of the Tax Cuts and Jobs Act

Current Law/TCJA:

  • Top marginal tax rate of 37%
  • $10,000 Cap on Salt Deduction
  • Elimination of many miscellaneous itemized deductions
  • Elimination of personal exemptions
  • Increase of the Standard Deduction (Currently $24,800)
  • 1031 exchanges limited to real estate only
ESTATE TAX

Current Law:

  • $11,580,000 gift/estate and generation-skipping exemption
  • Exemption returns to $5M, adjusted for inflation for 2026
PAYROLL TAX

Trump:

  • Has supported a reduction in payroll taxes, but has not offered specifics

Current Law:

  • 6.2% Social Security tax on wages up to $137,700
  • 1.45% Medicare tax on wages
  • 0.9% Additional Medicare tax on wages above $200,000 single/$250,000 joint
CORPORATE TAX

Current Law:

  • Corporate tax rate of 21%
  • Global intangible low-tax income (GILTI) minimum rate of 10.5%

Joseph Biden

INCOME TAX
  • Top marginal tax rate of 39.6% on income over $400,000
  • Long-term capital gain/qualified dividend rates of 39.6% for taxable incomes over $1M
  • Itemized deductions limited to 28% and restoration of itemized deduction limitations for taxable incomes above $400,000
  • Qualified Business Income deduction (199A) phased out for taxable incomes above $400,000
  • 1031 exchanges eliminated for taxable incomes over $400,000
  • New childcare tax credit of up to $8,000 per child
  • Expands the Earned Income Tax Credit
  • Renewable-energy related tax credits
  • Equalizing tax benefits of defined contribution plans (i.e. IRAs and 401ks)
  • Student loan forgiveness would not be taxable
ESTATE TAX
  • Eliminate step-up in basis
  • Unclear if this change would result in capital gains tax on death or capital gains tax to heirs upon a sale of the asset
PAYROLL TAX
  • Additional 12.4% social security tax on wage income over $400,000 evenly split between employees and employers.
  • There would be no additional tax on wages between $137,700 and $400,000.
CORPORATE TAX
  • Corporate tax rate of 28%
    15% minimum corporate tax for companies with book profits over $100M
  • Global intangible low-tax income (GILTI) rate of 21%

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