Here’s how the election could affect your taxes

As former President Donald Trump and Vice President Kamala Harris unveil their economic agendas, both presidential candidates have called for tax changes that could affect millions of Americans.

Taxes will be a key issue for the next president. Without action from Congress, trillions in tax breaks enacted by Trump via the Tax Cuts and Jobs Act, or TCJA, will expire after 2025. More than 60% of taxpayers could see higher taxes in 2026 without extensions, according to the Tax Foundation.

Expiring provisions include lower federal income tax brackets, a higher standard deduction, a bigger child tax credit and more generous estate and gift tax exemptions, among others.

More from Personal Finance:
Why free school lunches for all may become a campaign issue
Harris calls for expanded child tax credit with up to $6,000 for newborns
Trump and Harris both want no taxes on tips. Why experts don’t like the idea

However, “there’s a gulf between the political rhetoric around the 2017 tax law and the policy reality that both parties are going to face next year,” said Andrew Lautz, associate director for the Bipartisan Policy Center’s economic policy program.

While Democrats have criticized elements of the TCJA, both parties will likely agree to extend trillions in tax cuts, he said. But negotiations could be challenging amid concerns about the federal budget deficit. 

Extending TCJA provisions and subsidized premiums for marketplace health insurance could increase federal deficits by nearly $5 trillion over 10 years, according to the Bipartisan Policy Center.

Here’s a breakdown of where each candidate stands on tax policy.

Trump aims to preserve the individual and business tax cuts enacted via TCJA, the campaign said in a press release on Monday.

He addressed his tax agenda briefly during an event in York, Pennsylvania, on Monday, which countered the Democratic National Convention. During that speech, he promised “big tax cuts for families and small businesses.”

Harris hasn’t directly addressed TCJA extensions during her 2024 campaign. But President Joe Biden’s top economic advisor, Lael Brainard, in May voiced support for partial extensions.

“Achieving a fairer tax system also means we can’t extend expiring Trump tax cuts for those with incomes above $400,000,” Brainard said.

The Trump and Harris campaigns did not respond to CNBC’s request for comment.

The Harris campaign on Monday said she would push to increase the corporate tax rate to 28%, up from the 21% permanently enacted via the TCJA. The plan could reduce the deficit by $1 trillion over a decade, according to estimates from the Committee for a Responsible Federal Budget.

Meanwhile, Trump has called for sweeping tariffs, which are taxes levied on imported goods.

Trump’s proposed baseline 10% tariff and 60% levy on Chinese goods could reduce the average after-tax U.S. household income by roughly $1,800 in 2025, according to the Tax Policy Center.

During his event Monday, Trump pushed back on the assertion that tariffs would cost American consumers. “It’s a tax on a foreign country,” he said.

Both campaigns have also floated eliminating income tax on tip income, pitching the idea at separate events in Nevada, a battleground state and service industry hotbed. Harris announced her plan Aug. 10, roughly two months after Trump introduced his.

Harris on Friday announced an economic plan, including an expanded child tax credit worth up to $6,000 in total tax relief for families with newborn children, among other priorities.