Biden vs Trump on Proposed Business Tax Policy

With the November 2020 elections around the corner, let’s take a look at how the Presidential candidates proposed individual tax policies differ:

Corporate Tax Rate

Donald Trump: Lower the corporate tax rate from 21% to 20%.

Joe Biden: Raise the corporate tax rate from 21% to 28%.

Require C corporations with over $100 million in book income to pay the greater of normal corporate tax liability or 15% of book income.

Business Deductions

Donald Trump: Expand the meal and entertainment expense deduction.

Extend the 100% bonus depreciation that is scheduled to phase out beginning in 2023.

Retain the current deduction for research and development that is scheduled to expire after 2021.

Establish tax deductions for small businesses, restaurants, and the tourism industry as they look to rebuild after the pandemic

Joe Biden: Eliminate all deductions for expenses to advertise prescription drugs.

Increase the depreciable life of rental real estate.

Eliminate the deferral of capital gains from like-kind exchanges for real estate.

Establish incentives for opportunity zone funds to partner with nonprofit or community-oriented organizations, and jointly produce a community benefit plan for each investment. Require reporting, public disclosure of community impact, and Treasury oversight.

International Provisions

Donald Trump: Enact a 10.5% tax rate for companies that bring back to the U.S. supply chains for medicines and related products.

Joe Biden: Double the global intangible low-taxed income rate to 21%.

Impose sanctions on countries that “facilitate illegal corporate tax avoidance and engage in harmful tax competition.”

Select Tax Credits

Donald Trump: No proposal

Joe Biden: Expand the new markets tax credit and make it permanent.

Establish the manufacturing communities tax credit, and fund the credit for five years to reduce the tax liability of businesses that experience workforce layoffs or a major government institution closure.

Expand the work opportunity tax credit to include military spouses.

Expand the low-income housing tax credit.

Establish a workplace childcare facility tax credit of up to 50% of an employer’s first $1 million in costs for qualified on-site childcare.

The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.