The three top candidates for the Republican nomination for president offered up new information last week on their potential tax platforms.
For now, former President Donald Trump is focused on extending the expiring individual tax breaks from the Tax Cuts and Jobs Act and maintaining the 21% corporate rate, according to reports. He has not resurrected earlier proposals for a 15% corporate rate that he championed in 2016 and 2017, the budgetary cost of which could be up to $600 billion per year. That may be part of why Trump has not revisited his 15% preference, at least yet. Another could be more political: it’s simpler and in line with his populist base to run on individual tax cuts while maintaining the status quo on the corporate rate, which Republicans already cut by 14 percentage points during the first year of Trump’s presidency.
Former South Carolina Governor and UN Ambassador Nikki Haley has released the most detail about the three leading Republican candidates, calling for the elimination of the federal gas and diesel taxes, the elimination of the state and local tax deduction, the continuation of the 20% pass-through deduction, and further lowering of individual tax rates. Haley has also pledged to restore spending to 2019 levels and repeal the approximately $500 billion in energy tax credits created by the 2022 law known as the Inflation Reduction Act.
Florida Gov. Ron DeSantis told reporters on Jan. 4 that he favors implementation of a flat tax known as the “FairTax” and the elimination of the IRS. But he caveated his remarks by saying he only supported that if it was “lower taxes for everyone.” During his time in the House of Representatives, he previously cosponsored legislation to introduce the flat tax.
The next election will be important for the future of tax policy, as major parts of the TCJA are scheduled to expire or change at the end of 2025. Democrats have long criticized the bill and proposed undoing key aspects of it. Many Republicans, including House Ways and Means Chair Jason Smith, R-Mo., also view the coming cliff as an opportunity to revisit the tax code and consider major reforms. Tax policy may pick up some traction as a campaign issue in both the primary and general elections.
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