There is no doubt that tax policy will be a matter of debate in the upcoming election. The two parties could not stand further apart on their positions for just about everything, including taxes. While Trump and Harris have taken center stage to debate what’s next for America, it’s important to look at the two vice president candidates to understand what the future may hold. Nearly one third of vice presidents go on to serve as president, setting the tone for what’s beyond the next four years when it comes to tax policy. So where do Vance and Walz stand?
Recent legislative actions and public statements provide insights into the tax policy positions of Senators J.D. Vance and Tim Walz.
Senator J.D. Vance:
- Supports extending or making permanent the Tax Cuts and Jobs Act (TCJA) individual and estate tax relief provisions set to expire in 2025.
- Co-sponsored S. 866, the American Innovation and Jobs Act, aiming to retroactively restore immediate research and development expensing.
- Co-sponsored S. 1706, the Main Street Certainty Act Section 199A.
- Introduced S. 3514, the College Endowment Accountability Act, proposing to increase the excise tax on net investment income of large private university endowments from 1.4% to 35%.
- Co-introduced S.4011, the Stop Subsidizing Giant Mergers Act, with Sen. Sheldon Whitehouse, which would treat certain traditional tax-free reorganizations as taxable events for large corporations.
Senator Tim Walz:
- As governor of Minnesota, signed major tax reforms in 2023, including:
- Reducing the net operating loss deduction from 80% to 70% of taxable net income.
- Reducing the dividend received deduction by 30%.
- Expanding taxation of foreign income by defining and taxing global intangible low-taxed income (GILTI).
- As a congressman, focused on:
- Clean energy-related tax matters.
- Tax relief for current and former military members.
- Introduced the Middle-Class Tax Fairness Act of 2008, proposing:
- Increased standard deduction.
- Refundable Child Tax Credit.
- Business-related tax increases to fund these changes.
Sen. Vance generally aligns with traditional Republican tax priorities but has shown willingness to support certain tax increases and regulations on large corporations and institutions. Sen. Walz's record suggests support for middle-class tax relief and clean energy initiatives, balanced with some business tax increases.
What does this mean for tax professionals? We will all be waiting with bated breath to see the outcome of the November election, but these policy positions give us some indication of what may be on the horizon in terms of tax changes. Depending on whether your practice serves mostly businesses or mostly individuals, your clients could be impacted very differently by the institution of either set of policies. The only thing for certain right now is that nothing is for certain. The question marks around the TCJA expiration is making tax planning challenging.
Practitioners should anticipate tax law changes before yearend if there is a party change. Historically, the incumbent party will seek to solidify their tax law policies before leaving office.
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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