Future rules on capital gains are easily the top tax concern of voters as they look toward November’s presidential election, according to a MarketWatch poll.
The problem is, people are still waiting for lots of answers from presidential candidates when it comes to tax policy.
While the Biden administration wants super-rich households paying more than double their current tax rate, some tax experts say the incumbent’s Republican challengers — Donald Trump and Nikki Haley — still haven’t offered many specifics on taxes, let alone on capital-gains rules.
MarketWatch launched the polls on X, formerly known as Twitter, and on Instagram, in conjunction with the Jan. 29 start of the 2024 income-tax filing season.
Half of poll participants on X said capital gains are their top tax focus this election year, while the child tax credit came in second with nearly 23% of the vote. On Instagram, 64% of respondents said capital gains are their top tax concern.
The future of the state and local tax (SALT) deduction, now capped at $10,000, came in third at 19%. The tax credit to facilitate electric-vehicle purchases rounded out the bottom with just over 7% of the vote.
In a separate MarketWatch poll, six in 10 voters said billionaires should at least be paying taxes of 25%. That’s a nod to another Biden administration proposal.
To be sure, the polls are unscientific and pull from a small sample, but they give a glimpse at some of the questions running through taxpayers’ minds.
Broader polls show people have strong feelings on taxation. Most people said they are paying too much in taxes and few are assured the money is being used well, according to a recent poll from the University of Chicago Harris School of Public Policy and the Associated Press-NORC Center for Public Affairs Research.
Yet the 2024 presidential candidates haven’t been weighing in with their own views so far. “If taxpayers are really looking for a detailed tax-policy debate, they’ve been disappointed so far,” said Erica York, senior economist at the Tax Foundation, which is tracking candidates’ campaign ideas on taxes.
Generally, the Republican Party’s campaign tax talk has mostly been confined to talking points about lower taxes for families and businesses “without numbers and specifics,” York said.
“What [voters] are hearing now is really just generalities,” said Howard Gleckman, senior fellow at the Tax Policy Center.
What presidential candidates say about capital-gains taxes
Currently, long-term capital gains are taxed at 0%, 15% or 20%, depending on the taxpayer’s income level. This year, the top rate applies to single filers with incomes over $518,900 and married couples filing jointly with incomes over $583,750.
In his 2020 campaign, President Joe Biden wanted to bump the capital-gains rate to 39.6% for people making at least $1 million. He also wanted the top marginal rate to return to 39.6%, where it was before the Trump tax cuts temporarily lowered five of the seven tax brackets.
More recently, Biden’s administration has called for a top capital-gains rate that’s effectively 44.6% for households with over $1 million in taxable income. That’s a 39.6% top rate, plus a net investment income tax that would climb to 5% from the current 3.8%, according to a Treasury Department proposal connected to the budget process.
“The best clue to what the next president wants to do on taxes is what Joe Biden puts in his budget,” Gleckman said, noting that the administration will release another budget proposal in the coming months.
Former President Donald Trump and former South Carolina Governor Nikki Haley don’t yet have detailed capital-gains tax proposals, York said.
Representatives for the Trump and Haley campaigns did not immediately provide comment on the candidates’ capital-gains tax policies.
What the candidates want to do on taxes after 2025
For York, “the most glaring issue” is yet-unanswered questions about what will happen after the Trump tax cuts of 2017 expire at the end of 2025.
Without action, the child tax credit and standard deduction would both shrink, while five of seven marginal tax rates would increase. But making the tax cuts permanent would cost more than $3 trillion, according to projections at the Tax Foundation and elsewhere.
“We haven’t really seen a fully fleshed-out plan from anyone as to how they would handle those expirations,” York said. That applies to the Biden campaign as well, she added.
The House of Representatives could soon vote on one bill making the child tax credit more generous for lower-income workers. Those changes would run through 2025 if they became law.
Gleckman is skeptical that anyone’s presidential run will wade deep into taxes. “Then 2025 is going be this mad scramble to figure what to do with the tax code,” he told MarketWatch.
The White House has said it supports continuing the tax cuts for households under $400,000, paired with reforms so that corporations and rich households pay their “fair share. ”
A Biden campaign spokesperson referred comment to the White House, which did not immediately respond to a request for comment.
Of course, the Trump and Haley campaigns have tax- and economic-policy ideas. For example, Haley wants to end the federal gas tax, which is 18.4 cents per gallon, and keep the 20% deduction for small businesses intact so that it doesn’t expire at the end of next year.
Trump reportedly wants to make his 2017 individual tax cuts permanent. Another economic plank of his is a 10% tariff on all imports, following up on one of the signature policies of his first administration. York is among the critics against more tariffs, calling them “a tax on American consumers.” But without specifics, it’s difficult to gauge the potential impact on households, she said.
Read also: Haley says Trump’s new 10% tariff would mean ‘raising taxes on every single American’
The Trump campaign has pushed back on tariff criticisms, and a spokesperson Tuesday pointed at public support for the 10% tariffs.
The proposal would give a leg up to domestic manufacturing, Oren Cass, executive director of the conservative think tank American Compass, said in a Wall Street Journal opinion piece in October.
More taxes for billionaires?
Another MarketWatch poll asked if billionaires should pay a minimum tax of at least 25% — to which 60% of participants on X responded “yes,” as did 62% of respondents on Instagram.
The Biden administration has a proposal where households worth at least $100 million would pay a 25% minimum tax that also accounts for the worth of “unrealized” capital assets.
The Supreme Court could soon chime in on these types of taxes aimed at the ultra-wealthy.
Justices heard a case in December about the constitutionality of taxing unrealized gains. Observers say the ruling might clear — or close off — the legal underpinning behind the Biden wealth-tax proposal.
For now, all sides await a decision. The Supreme Court’s term finishes in late June — deep into the presidential-campaign calendar.
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