The Democratic National Convention has formally adopted their 90-plus-page 2024 party platform. While Vice President Harris hasn’t yet fully outlined her economic agenda and views on tax policy, she’s expressed her support for the DNC platform and Biden’s 2025 fiscal year budget, which calls for nearly $5 trillion in tax increases over the next ten years.

There’s no doubt that federal taxes will be a key issue this election season. The landmark Tax Cuts and Jobs Act (TCJA) made sweeping changes to the federal tax rules, and many of its provisions are scheduled to expire at the end of 2025.

Check out key tax provisions from the Republican National Convention, which took place in July, in our blog, TCJA Expiration on the Horizon: Understanding Key Tax Provisions from the RNC.

Key Takeaways from the DNC

Helping Working Americans

Many of the TCJA provisions that affect individual taxpayers are only temporary. The DNC platform — though critical of the TCJA — doesn’t propose reversing the law entirely, but instead extending (and possibly expanding) certain provisions that benefit working Americans.

Specifically, the platform proposes:

• Expanding the child tax credit from $2,000 to $3,600 per child,
• Introducing a new $6,000 tax credit for children in their first year of life,
• Expanding the earned income tax credit for lower income taxpayers,
• Creating a national paid family and medical leave program, guaranteeing up to 12 weeks of paid time off to care for a new child or loved one to recover from an illness, in cases of domestic violence, or military deployment,
• Expanding the Affordable Care Act (ACA) and introducing a permanent health insurance premium tax credit for families who buy coverage on an ACA exchange,
• Offering a $10,000 mortgage-relief tax credit for first-time homebuyers and people selling their first homes,
• Providing $25,000 in down-payment assistance to buyers from families that haven’t previously owned homes,
• Increasing funding for programs that support the creation and preservation of affordable housing for essential workers, such as teachers, nurses and firefighters,
• Capping childcare costs for low-income families at 7% of their income,
• Expanding tax breaks for home use of clean energy,
• Pursuing the Biden administration’s student debt relief and Pell Grants measures,
• Reinstating the Biden administration’s internet affordability program, which expired in May 2024,
• Introducing a disaster resilience tax credit to help lower- and middle-income families and small businesses manage the effects of natural disasters, and
• Investing in public schools.

During her acceptance speech at the DNC convention, Harris also promised to pass “a middle class tax cut that will benefit more than 100 million Americans,” without providing additional details.

Tip income

Additionally, at a recent campaign speech, Harris echoed Trump’s support for eliminating taxes on tip income for service and hospitality workers. Although there are differences between the candidates’ plans for tax-free tip income, the DNC platform doesn’t specifically mention this idea, which critics say would complicate the federal tax rules.

Increasing Taxes on the Wealthy

To help bridge the tax gap at the individual level, the DNC platform supports increasing the top marginal income tax rate from 37% to 39.6%. The TCJA reduced the top tax rate to 37%, and this provision is scheduled to expire. So, unless Congress passes legislation to extend this rate or make it permanent, the DNC proposal will go into effect under current law starting in 2026.

Other DNC proposals affecting high net worth individuals:

• Eliminating like-kind exchange treatment for real property,
• Establishing a minimum income tax rate of 25% for billionaires,
• Increasing the current favorable tax rates on long-term capital gains to ordinary income tax rates for millionaires,
• Eliminating abusive life insurance tax shelters and retirement tax incentives for billionaires,
• Closing the “carried interest” tax loophole,
• Increasing the stock buyback tax to 4% to discourage stock buybacks that benefit executives and wealthy shareholders, and
• Increasing IRS funding for enforcement initiatives aimed at “wealthy and corporate tax cheats.”
• Ending the stepped-up basis at death. This means heirs would no longer receive a tax-free increase in an asset’s value to its market value at the time of inheritance. Instead, unrealized gains on inherited assets would be taxed.

Increasing Taxes for Big Businesses

The TCJA permanently lowered the corporate tax rate to 21%. The DNC platform proposes raising it to 28%, adding $1.3 trillion in revenue over the next 10 years, according to estimates from the U.S. Treasury. In addition, it calls for ending federal oil and gas subsidies, special tax breaks for corporate jets and tax deductions for executive pay over $1 million per year. The platform would also introduce a “global minimum tax” that would force U.S. multinationals to pay a 21% tax rate on foreign earnings.

Beyond taxes, the platform also promises to:

• Raise the federal minimum wage to at least $15 per hour,
• Eliminate surprise medical billing and “junk fees,” such as those charged by credit card companies, banks, internet providers and hotels,
• Cap credit card late fees and bank overdraft charges,
• Impose a federal ban noncompete agreements, and
• Implement stricter regulations on mergers and acquisitions between large corporations to promote fair competition and control consumer prices.
• Increase banking, housing, workplace safety and environmental regulations.

More details will be revealed on the campaign trail this fall. We’re closely monitoring tax proposals from both sides of the aisle to help individuals and businesses plan for the future.