With the re-election of President Donald Trump in November 2024, there can be many significant changes. These could influence individual tax brackets, corporate tax rates and various deductions. Understanding them can allow you to prepare an effective tax plan. To help you do this, we will compare the tax and economic policies of Joe Biden vs. Donald Trump.
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Get Started NowBiden vs. Trump: Tax Brackets
One of the major victories for President Trump during his first administration was the 2017 Tax Cuts and Jobs Act, which was passed in 2017. This was a major overhaul of the tax system and established the current standard deduction and tax brackets.
2025 Federal Tax Brackets
| Rate | Single | Married, Filing Jointly | Married, Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 | $0 – $11,925 | $0 – $17,000 |
| 12% | $11,925 – $48,475 | $23,850 – $96,950 | $11,925 – $48,475 | $17,000 – $64,850 |
| 22% | $48,475 – $103,350 | $96,950 – $206,700 | $48,475 – $103,350 | $64,850 – $103,350 |
| 24% | $103,350 – $197,300 | $206,700 – $394,600 | $103,350 – $197,300 | $103,350 – $197,300 |
| 32% | $197,300 – $250,525 | $394,600 – $501,050 | $197,300 – $250,525 | $197,300 – $250,500 |
| 35% | $250,525 – $626,350 | $501,050 – $751,600 | $250,525 – $375,800 | $250,500 – $626,350 |
| 37% | $626,350+ | $751,600+ | $375,800+ | $626,350+ |
This plan was actually not as radical as the plan the Republicans originally proposed, which would have reduced the total number of brackets to just four. And, of course, it isn’t the flat tax that many tax hawks dream of. Still, it was generally seen as a win for high-income earners, who saw their tax rate lowered.
President Biden tried to reverse different aspects of the 2017 tax overhaul, calling for higher taxes on capital gains and high net worth individuals.
He proposed tax plan in 2020 called for the highest tax brackets rate to be restored to 39.6%, where it stood before the 2017 bill. Biden also said he would not raise taxes on anyone earning less than $400,000.
Biden vs. Trump: Corporate Tax Rate
This is another area where Biden aimed to reverse changes the Trump administration (along with Republicans in Congress) made through the 2017 Tax Cuts and Jobs Act. That law lowered the corporate income tax rate from 35% to 21%.
Biden called for the corporate income tax rate to be raised — though not to the level it was before 2017. Instead, he wanted to settle in the middle with a new corporate tax rate of 28%. Biden had two other major points in terms of corporate tax policies: He wanted to establish a minimum 15% tax for corporations, meaning that regardless of any tax breaks or other loopholes, every corporation pays at least 15% income tax on all revenue reported to investors. Biden also planned to tax foreign profits of American corporations at 21%, while Trump’s bill placed this rate at 10.5%.
Biden vs. Trump: Tax Deductions
Deductions are used on a person’s tax return to lower the income they have to pay federal income tax on. In Trump’s 2017 bill, the standard deduction for a single filer was increased from $6,350 to $12,200.
For the 2024 tax year, which you file in 2025, the deduction has gone up to $14,600 individuals ($15,000 for the 2025 tax year) and $29,200 for joint filers ($30,000 for the 2025 tax year).
Biden, meanwhile, focused on those taxpayers who choose to itemize their deductions — which generally, means the wealthy. He plans to cap the benefit of an itemized deduction to 28% of the value, which will limit the ability of wealthy people and families to cut their tax liability through things like charitable contributions.
Biden vs. Trump: Capital Gains Taxes
Capital gains refers to money investors make they sell an asset — for example, a stock or bond — for more than they bought it for. Currently, these gains are taxed at a rate of up to 20%. Trump had proposed the idea of lowering this as part of a plan that he said would lower overall middle class tax burdens.
Biden, meanwhile, wanted to stop treating capital gains differently from all other income. Short-term capital gains — gains on assets held for less than a year — are already taxed at normal income tax rates. But Biden’s plan singled out taxpayers earning more than $1 million. For them, the plan aimed to tax their long-term capital gains — gains on assets held for more than a year — at the same rate as income earned through wages and bonuses.
For those who earn a lot of money through all streams each year, this could be a big change if it is ever implemented. For example, if a taxpayer’s income is in the top tax bracket already, any additional money earned through capital gains would now be taxed at 39.6% under Biden’s plan, instead of 20% under Trump’s tax act.
Biden vs. Trump: Financial Transactions Tax
A financial transactions tax (FTT) has been a topic of debate among progressive policymakers. Such a tax would impose a levy on trades of stocks, bonds and derivatives. This would aim to curb speculative trading and generate revenue.
Biden expressed support for an FTT, but it was not part of his tax plan. Trump did not issue any statements on the tax either, and following Republican party general ideology against raising taxes, it seems reasonable that he would not support it.
Biden vs. Trump: Trade
Trade may not impact individual consumers as directly as tax rates and deductions, but the nation’s trade policies ultimately impact everyone. This is something that the two main political parties in America have greatly disagreed on over time.
Trade is one of the areas of public policy where the Trump administration did the most in his first four years in office. They dropped out of the Trans Pacific Partnership (TPP), renegotiated the North American Free Trade Agreement (NAFTA) (renaming it the United States-Mexico-Canada Agreement) and engaged in what many call a “trade war” with China.
Biden, on the other hand, wanted to work with American allies to combat the rise of China as an economic superpower rather than attempt to do it alone as Trump had done. Biden said he wanted to renegotiate the TPP, potentially clearing the way for the U.S. to back into the pact.
At the start of his second term, the Trump administration is using tariffs and trade talks to manage trade imbalances and protect local industries. As an example, Trump ordered a 25% tariff on all imports from Canada and Mexico and a 10% tariff on Canadian energy exports. These tariffs were later paused for 30 days after Canada and Mexico agreed to strengthen border enforcement.
Biden vs. Trump: Economic Winners and Losers
Though it’s hard to look ahead and accurately predict exactly who will win and lose economically under a presidential administration, their proposals and legislation can help you make informed decisions about your situation.
Trump’s tax policies focus on reducing corporate and individual tax rates, which limits revenue growth and cuts social programs. In 2025, his administration has already made significant federal budget cuts aimed at reducing spending.
President Biden’s tenure, by contrast, aimed to raise revenue through higher taxes on corporations and wealthy individuals. His administration proposed using these funds to strengthen social programs, including expanding healthcare access through a public option under the Affordable Care Act (ACA) without moving toward a single-payer system.
Although a public option has not been implemented, the ACA received extended funding through the Inflation Reduction Act of 2022. This law helped lower healthcare costs for many Americans by extending subsidies for marketplace plans and reducing prescription drug prices. Future healthcare policy changes will likely depend on congressional negotiations and economic conditions.
Bottom Line
There were key policy differences between President Trump and President Biden when they ran head-to-head in 2020, and there are similar differences today after Trump won a second term. Generally, Trump’s approach is more beneficial to corporations and high earners, while Biden has sought to make these entities and high-earning individuals pay a bigger share of their wealth to the government. There are benefits to both approaches but neither seems to solve the tax issues entirely.
Tips for Tax Planning
- Changes in the tax code could impact your finances. Consider working with a financial advisor to create a tax plan for your finances. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Good tax software can help you avoid missing a tax credit or deduction. SmartAsset evaluated common tax filing services to find the best online tax software for your needs.
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