Kimberly Clausing, tax expert, discusses Trump vs. Biden tax policies, implications of tax cuts for wealthy elites, corporate tax rates and profit shifting challenges, IRS funding implications, and the impact of tax policies on different income groups. Clausing also highlights the evolution of tax policies under Presidents Biden and Trump, emphasizing changes in tax rates, poverty reduction efforts, and clean energy investments.
Trump focused on tax cuts benefiting corporations and the wealthy, while Biden aimed at increasing taxes for the rich and providing relief to working families.
Biden's tax policies included expanding tax credits to reduce child poverty and addressing social issues, promoting fair tax burden distribution.
Deep dives
Comparison of Tax Policies Under Trump and Biden
Under the Trump administration, there was a focus on tax cuts that primarily benefited corporations and the wealthiest individuals. The Tax Cuts and Jobs Act reflected this approach, reducing corporate taxes significantly and providing individual tax cuts, including benefiting the top earners. In contrast, the Biden administration has emphasized increasing tax compliance and payments for the wealthiest earners and corporations while reducing tax burdens for working families and the lowest-income individuals.
American Rescue Plan and Inflation Reduction Act
The American Rescue Plan enacted under the Biden administration brought significant tax changes, particularly expanding the Earned Income Tax Credit and the Child Tax Credit. These expansions aimed to alleviate poverty, provide incentives for labor force participation, and support families with young children. The Inflation Reduction Act included provisions to address healthcare costs, energy expenses, and combat climate change through tax incentives for clean energy investments.
Impact on Child Poverty and Tax Compliance
The measures like the expanded Child Tax Credit and Earned Income Tax Credit have played a crucial role in reducing child poverty, demonstrating effective tools to address social issues like poverty. Moreover, the Biden administration's focus on enhancing tax compliance for wealthy individuals and corporations aims to close the tax gap and ensure a fairer distribution of tax burdens across different income levels.
Tax Policy Focus on Wealth Distribution
The comparison between tax policies under Trump and Biden reveals divergent approaches in wealth distribution. While Trump's tax cuts favored corporations and the wealthy disproportionately, Biden's policies have sought to rebalance by increasing taxes for the wealthiest while providing relief for lower-income families. These contrasting strategies underscore the broader socio-economic goals each administration pursued through their tax policies.
We’re thrilled to share the second episode in our WITHpod 2024: The Stakes series, in which we choose specific areas of policy and talk to an expert about Trump and Biden’s records on the topic. This week, we discuss the candidates’ stances and records on one of the most important and contested topics: tax policy. Kimberly Clausing is the Eric M. Zolt Chair in Tax Law and Policy at the UCLA School of Law. Before that, she was the deputy assistant secretary for tax analysis in the U.S. Department of the Treasury. Clausing also served as the lead economist in the Office of Tax Policy during the first part of the Biden Administration. She joins WITHpod to discuss Trump vs. Biden tax and economic policy, notable changes in IRS funding, who is most affected by recent major tax legislation and more.
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