Joe Biden vs. Donald Trump: Tax and Economic Policies

With the re-election of President Donald Trump in November 2024, federal tax policy has shifted away from the approach taken under President Joe Biden. Biden sought higher taxes on corporations and high-income households to fund expanded social programs, while Trump has focused on extending lower tax rates. Those priorities are reflected in the One Big Beautiful Bill Act, signed in 2025, which preserves the 21% corporate tax rate established under the 2017 Tax Cuts and Jobs Act and largely maintains the existing individual tax structure while introducing targeted changes for seniors and businesses.

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Biden vs. Trump: Tax Brackets

Trump’s signature legislative victory during his first administration was the 2017 Tax Cuts and Jobs Act (TCJA). During Trump’s second term, those rate structures have largely been preserved. The One Big Beautiful Bill Act (OBBBA) extended the existing marginal tax brackets rather than allowing them to expire, maintaining the top individual rate at 37% instead of reverting to the pre-2018 level of 39.6%. As a result, the basic bracket framework remains closely aligned with the system created under the 2017 Tax Cuts and Jobs Act.

2026 Federal Tax Brackets

Rate	Single	Married, Filing Jointly	Married, Filing Separately	Head of Household
10%	$0 – $12,400	$0 – $24,800	$0 – $12,400	$0 – $17,700
12%	$12,400 – $50,400	$24,800 – $100,800	$12,400 – $50,400	$17,700 – $67,450
22%	$50,400 – $105,700	$100,800 – $211,400	$50,400 – $105,700	$67,450 – $105,700
24%	$105,700 – $201,775	$211,400 – $403,550	$105,700 – $201,775	$105,700 – $201,750
32%	$201,775 – $256,225	$403,550 – $512,450	$201,775 – $256,225	$201,750 – $256,200
35%	$256,225 – $640,600	$512,450 – $768,700	$256,225 – $384,350	$256,200 – $640,600
37%	$609,351+	$768,700+	$384,350+	$640,600+

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.

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 a tax plan in 2020 called for the highest marginal tax 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.

Check out our in-depth study to learn more about how the One Big Beautiful Bill Act (OBBBA) impacts Americans across the country.

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 TCJA. That law lowered the corporate income tax rate from 35% to 21%.

Biden called for raising the corporate income tax rate, though not to the level in place before 2017. Instead, he proposed 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%.

Trump’s second-term tax legislation did not raise the corporate tax rate. Instead, OBBBA preserved the 21% corporate rate established in 2017. While the administration has emphasized tariffs and trade policy as tools to support domestic manufacturing, the statutory corporate income tax rate has remained unchanged.

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.

Biden, by contrast, focused on limiting the tax advantages available to higher-income taxpayers who itemize deductions. During his presidency, he proposed capping the value of itemized deductions at 28%, a change that would have reduced the ability of wealthy individuals and families to lower their tax bills through deductions such as charitable contributions. However, this proposal was not enacted into law.

Under Trump’s second term, OBBBA permanently extended the higher standard deduction rather than allow it to revert to pre-2018 levels. For example, the standard deduction in 2026 is $16,100 ($32,200 for married couples filing jointly).

OBBBA also introduced a temporary enhanced deduction for seniors age 65 and older. From 2025 through 2028, eligible seniors may claim an additional $6,000 deduction per person, subject to income-based phaseouts. While this provision does not change how Social Security benefits are taxed directly, it can reduce overall taxable income for qualifying retirees.

Biden vs. Trump: Capital Gains Taxes

Capital gains refer to the profit investors earn when they sell an asset, such as a stock or bond, for more than its purchase price. Currently, these gains are taxed at rates of up to 20%.

Biden, meanwhile, wanted to stop treating capital gains differently from other types of income. Short-term capital gains, which apply to assets held for less than a year, are already taxed at ordinary income tax rates. His proposal focused on taxpayers earning more than $1 million, for whom long-term capital gains on assets held for more than a year would have been taxed at the same rates as wages and bonuses.

The proposal was never enacted, as it did not pass Congress and was ultimately not included in any tax legislation signed into law during his presidency.

For those who earn a lot of money through all streams each year, that could have been 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 have been taxed at 39.6% under Biden’s proposal.

Biden vs. Trump: Financial Transactions Tax

A financial advisor discussing how policy changes affect clients during a presidential tenure.

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 openness 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 began 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.

These tariffs represent a more aggressive use of trade policy during Trump’s second term and may indirectly affect consumers through higher prices, even though they are not taxes collected through the income tax system.

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 cut government programs. In 2025, his administration enacted federal spending reductions alongside tax extensions, prioritizing deficit control while maintaining lower tax rates for corporations and higher-income households.

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 those differences have become clearer following Trump’s second-term legislative agenda. Trump’s tax policies continue to emphasize lower individual and corporate tax rates, temporary deductions and trade-based enforcement, while Biden focused on raising revenue from corporations and high-income taxpayers to fund expanded social programs.

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.
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