On November 5, the U.S. presidential election officially opened for voting, with an exceptionally intense election atmosphere and record-high voter turnout. Ultimately, Republican candidate Donald Trump defeated Democratic Vice President Kamala Harris by a significant margin, successfully winning the election and returning to the White House. This makes him the first candidate in U.S. history to win two non-consecutive presidential terms.
Main Policy Directions During Trump's Presidency
1. Tax Policy: Centered around the Tax Cuts and Jobs Act of 2017, significantly reducing corporate tax rates to encourage domestic investment and economic growth; personal income tax rates were also reduced, and the tax system was simplified.
2. Immigration Policy: Strengthening border security, strictly controlling illegal immigration, including the construction of a border wall and the implementation of the "Remain in Mexico" policy; tightening legal immigration policies, attempting to tilt more immigration quotas towards high-skilled fields.
3. Housing Policy: Relaxing support for first-time homebuyers, expanding development permissions on certain federal lands, and supporting first-time home purchases to promote homeownership.
4. Healthcare Policy: Implementing healthcare reform and controlling drug prices, alleviating drug shortages by bringing the production of key drugs "back to America."
Overall, Trump's policies tend to promote economic growth, strengthen national security, and protect domestic industries, prioritizing the interests of the U.S. economy and industries.
Main Tax Policies During Trump's Presidency
And the Potential Impact on the U.S. Tax System
Tax Cuts and Jobs Act of 2017
Core Content of Trump's Tax Reform
The Tax Cuts and Jobs Act of 2017 (TCJA) was the first major legislative victory for Trump and the Republican Party, and it is the most significant tax reform legislation in the U.S. since 1986. This tax reform generally reduced the tax burden on corporations, individuals, and families. The reform can promote U.S. economic growth and employment to some extent, while also leading to economic inequality and increasing debt, and having significant political implications. The reform will enhance the international competitiveness of U.S. businesses and create capital outflows and tax reduction pressures for other countries. The core content of the Tax Cuts and Jobs Act includes the following points:
Personal Taxation
1. Reduction of Marginal Tax Rates: The highest personal income tax rate was reduced from 39% to 37%.
2. Doubling of Standard Deduction: The standard deduction for single taxpayers increased from $6,350 to $12,000, and for married couples filing jointly, it increased from $12,700 to $24,000.
3. Increase in Child Tax Credit: The child tax credit increased from $1,000 to $2,000. Trump's running mate, Senator Vance, expressed his desire to raise the credit to $5,000 per child.
4. Alternative Minimum Tax (AMT) Adjustment: The threshold for the alternative minimum tax was raised, allowing more taxpayers to be exempt from this tax.
5. Estate Tax: The estate tax exemption doubled from $5.49 million to $11.18 million (the individual exemption for 2024 is $13.61 million, and the couple's exemption is $27.22 million).
Corporate Taxation
1. Reduction of Corporate Income Tax Rate: The highest corporate income tax rate was reduced from 35% to 21%.
2. Small Business Tax Benefits: A 20% deduction was provided for pass-through entities such as partnerships, limited liability companies (LLCs), and S corporations. Section 199A - Qualified Business Income Deduction
3. Global Intangible Low-Taxed Income (GILTI): The GILTI tax is part of the Tax Cuts and Jobs Act of 2017 (TCJA), signed into law by the Trump administration. The minimum effective tax rate for global intangible low-taxed income earned by multinational corporations overseas is set at 10.5%.
4. Immediate Expensing of Capital Investments: Businesses are allowed to fully deduct the costs of newly purchased equipment and other capital expenditures immediately, rather than depreciating them over several years.
5. Base Erosion and Anti-Abuse Tax (BEAT): A tax established for multinational companies' internal transactions to prevent companies from reducing the U.S. tax base by shifting profits to low-tax countries.
Continuation of Trump's Tax Reform Measures and Future Outlook
The Trump administration plans to extend the tax reform until 2035, and the realization of this goal will depend on Congressional approval. With the Republican Party controlling the Senate, Trump may gain support on some tax reform issues; the final control of the House of Representatives is not yet fully clear, but Republicans are optimistic about achieving a three-peat in governance with the newly elected President Donald Trump. If both the House and Senate are ultimately controlled by the Republicans, Trump's tax reform extension plan is more likely to proceed smoothly.
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