TaxJourney®

As the November elections approach, tax policy has emerged as a critical issue for American businesses. The 2017 Tax Cuts and Jobs Act (“TCJA”), enacted during Former President Donald Trump’s presidency, includes several provisions set to expire in 2025, making tax proposals from both candidates particularly relevant.

While the policies of Vice President Kamala Harris and Donald Trump both share some common ground, such as eliminating income tax on tips and expanding the child tax credit, significant differences exist in their tax plans.

The tax policies of Donald Trump and Kamala Harris for the 2024 presidential election present distinct approaches to corporate, individual, and trade taxes. Here is how their policies compare.

Corporate Tax Rates

Kamala Harris: Proposes raising the corporate tax rate from 21% to 28%, aligning with previous proposals by President Biden.

Donald Trump: Suggests reducing the corporate tax rate to between 15% and 20%, specifically incentivizing companies that manufacture domestically.

Individual Income Taxes

Kamala Harris: Plans to increase the top individual income tax rate from 37% to 39.6% for individuals earning more than $400,000, while ensuring no tax increases for those earning less.

Donald Trump: Aims to make the individual tax cuts from the TCJA permanent, which would benefit higher-income earners more significantly.

Capital Gains Taxes

Kamala Harris: Supports raising the capital gains tax rate to 33% for individuals earning over $1 million annually, including a new tax on unrealized capital gains for those with a net worth over $100 million.

Donald Trump: Has not proposed specific changes to capital gains taxes.

Child Tax Credit

Kamala Harris: Proposes increasing the child tax credit significantly, offering $3,600 for children aged 0-5 and $3,000 for children aged 6-17.

Donald Trump: Supports maintaining the current child tax credit at $2,000 per child but has not detailed plans for expansion.

Trade and Tariffs

Kamala Harris: The Biden-Harris administration has implemented tariffs on specific imports such as electric vehicles and certain raw materials, aiming to raise revenue without significantly impacting household incomes.

Donald Trump: Proposes a universal baseline tariff on all imports between 10% and 20%, with a specific 60% tariff on imports from China, which could reduce after-tax incomes for American households.

Other Proposals

Both candidates agree on exempting tips from income taxation to support hospitality workers.

Kamala Harris: Plans to increase deductions for small business startups and provide down payment assistance for first-time homebuyers.

Donald Trump: Proposes exempting Social Security benefits and overtime pay from taxation.

These proposals reflect differing priorities in terms of economic growth, income distribution, and fiscal policy impacts. Both candidates’ plans are projected to increase the national deficit over the next decade, with varying effects on different income groups.

Photo Credits: BBC News

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The information contained in this post is merely for informative purposes and does not constitute tax advice. For more information, feel free to reach us at [email protected]

Copyright 2025 Small World Business Advisors LLC www.swbadvisors.com

On Wednesday, August 7, 2024, Italian government approved a measure that increases the “flat-tax” imposed on individuals who elect to be part of the regime and obtain tax residency in Italy. The decree doubles the existing 100,000 euros flat-tax to 200,000 euros (approximately $218,000) per year.

The “flat-tax” regime in essence is a cap on tax on foreign sourced income for high-net-worth individuals. These flat-tax rules serve as an incentive for foreigners to transfer their residence to Italy while also coaxing Italians living abroad to repatriate.

The favourable tax regime for rich new residents was originally introduced by a centre-left government in 2017, with a view to lure ultra-high spenders to boost Italy’s sluggish economy.

The doubling of the flat tax will only apply on a prospective basis, the decree spells out, clarifying that those who are already part of the regime will be grandfathered in.

The increase has garnered mixed reactions amongst the wealthy expats community; where some taxpayers question the stability and predictability of the “flat-tax” regime.

Overview of the Italy’s Flat-Tax Regime

The regime replaces the standard progressive income tax rate with an annual “flat tax” of €100,000 (now €200,000) on all foreign-sourced income for a period of up to 15 years.

The existing €100,000 tax incentive, while popular with wealthy individuals, has been controversial among Italian locals who blame the recent influx of the super-rich for a sharp increase in real estate prices and other rises in living costs.

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The information contained in this post is merely for informative purposes and does not constitute tax advice. For more information, feel free to reach us at [email protected]

Copyright 2025 Small World Business Advisors LLC www.swbadvisors.com

July 1, 2024

U.S. and Switzerland executed a new intergovernmental agreement (“IGA”) to implement the U.S. Foreign Account Tax Compliance Act (“FATCA”) on June 27, 2024, in Bern, Switzerland.

The new Model 1 IGA, to come into effect starting 2027, provides for the reciprocal automatic exchange of information, addresses legal impediments, reduces burdens for Swiss financial institutions, and improves international tax compliance.

Previously (in its current form through 2026), the United States and Switzerland signed a Model 2 IGA to facilitate the implementation of FATCA, which entered into force on June 2, 2014, pursuant to which Switzerland unilaterally provides information on financial accounts to the U.S. Under the Model 1 IGA effective 2027, Switzerland will begin to receive corresponding information from the U.S. through automatic exchange of information. The current (Model 2) IGA will terminate upon entry into force of the new Model 1 IGA.

FATCA came into effect in 2014, requiring foreign financial institutions to provide U.S. tax authorities with information about US accounts or face withholding taxes

“This agreement improves the lives of Americans living and working in Switzerland and Swiss citizens living and working in the United States, who contribute to our joint prosperity. This agreement will further strengthen the thriving personal and economic ties between our Sister Republics.” – Scott Miller, U.S. Ambassador

The U.S. Congress enacted FATCA in 2010 as part of the Hiring Incentives to Restore Employment Act. FATCA requires foreign financial institutions to report to the Internal Revenue Service information about financial accounts held by U.S. taxpayers or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

The June 27 2024 Agreement

Courtesy: State Secretariat for International Finance SIF

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The information contained in this post is merely for informative purposes and does not constitute tax advice. For more information, feel free to reach us at [email protected]

Copyright 2025 Small World Business Advisors LLC www.swbadvisors.com