Executive Summary

As Americans head into the 2024 presidential election, Kamala Harris and Donald Trump present voters with two contrasting economic paths. Both candidates anchor their platforms in tax policies designed to appeal to key constituencies—Harris focusing on equity and social mobility, while Trump emphasizes economic growth through tax relief. This article presents a comprehensive analysis of their most recent income tax returns, an overview of their proposed tax policies, an examination the personal financial implications for each candidate, and an objection evaluation of which proposals offer the greatest economic benefit for the nation.

Tax Return Overview of the Candidates

Kamala Harris’s 2023 Tax Return: A Detailed Overview

1. Adjusted Gross Income (AGI):

• AGI: $450,299
  The AGI reflects combined income from Kamala Harris’s vice-presidential salary and Georgetown University income from her husband, Doug Emhoff.

2. Total Income Components:

• Wages and Salaries: $218,784
  This represents Harris’s vice-presidential salary.
• Business Income: $174,594
  Income from Doug Emhoff’s professorship.
• Interest and Dividend Income: $5,924
  Modest passive income from investments.
• Capital Gains: $0
  No reportable income from the sale of securities or other capital assets.

3. Itemized Deductions:

• Total Deductions: $59,276
  Harris and Emhoff itemized deductions, which include contributions to charitable organizations and payments on state and local taxes.

4. Charitable Contributions:

• Total Contributions: $23,026
  Donations were made across several charitable organizations. These contributions reflect a continued commitment to philanthropy, although the amounts remain modest relative to their income.

5. Federal Income Tax Paid:

• Federal Tax Liability: $88,570
  Harris’s household paid approximately 22% of their AGI in federal income tax.

6. State Taxes Paid:

• California State Taxes: $15,167
• The couple also paid $11,599 in state taxes to the District of Columbia.
  This reflects the complex tax situation associated with multi-state incomes.

7. Refunds and Payments:

• Total Overpayment: $501
  Harris and Emhoff overpaid their estimated taxes, resulting in a refund or credit toward future liabilities.

Key Observations and Strategy Insights

Kamala Harris and Doug Emhoff’s 2023 tax return highlights a traditional income profile for a high-earning household, with most of their income derived from salaries. They continue to employ itemized deductions to reduce taxable income. However, their limited capital gains and passive income reflect a conservative financial strategy focused more on earned income rather than investment income.

• Use of Deductions: The couple benefits from state and local tax deductions, although these are limited under current tax law.
• Charitable Contributions: Their charitable giving, while present, does not reflect aggressive philanthropy, suggesting they retain a larger share of income compared to other high-net-worth individuals with similar profiles.
• Multi-State Taxation: Harris’s return also reflects the administrative complexity of state taxes across California and D.C., offering insights into the financial challenges faced by public officials with multi-jurisdictional income.

Donald Trump’s 2020 Tax Return: A Detailed Overview

1. Adjusted Gross Income (AGI):

• AGI: -$4,795,757 million
  The negative AGI reflects significant losses from business operations, which align with Trump’s established strategy of using real estate depreciation and other losses to offset income.

2. Total Income Components:

• Wages and Salaries: $393,229
• Interest Income: $10,682,179
• Dividend Income: $25,357
• Business Income (Loss): -$15,825,345
  Trump reported losses from his business ventures, primarily stemming from real estate holdings. These losses drastically reduced his taxable income.
• Capital Gains: $0
  No reported income from the sale of securities or property in 2020.

3. Itemized Deductions:

• Total Deductions: $915,171
  Trump itemized deductions heavily, including real estate taxes and mortgage interest, which further reduced his tax liability. His use of deductions highlights his reliance on losses from business operations to offset other sources of income.

4. Charitable Contributions:

• Total Contributions: $0
  Unlike in previous years, Trump reported no charitable contributions for the 2020 tax year, which is notable given his past record of donations and pledges.

5. Federal Income Tax Paid:

• Taxable Income: $0
• Total Tax Paid: $0
  Trump’s reported business losses and deductions fully offset his income, resulting in no federal income tax owed for 2020. This outcome continues a trend of limited or no income tax liability in previous years.

6. Refunds and Credits:

• Refunds Claimed: $13,468,593 ($5,468,593 refunded and $8m applied to 2024)
  The return shows Trump requested a refund for overpayments from previous years, possibly linked to estimated tax payments made throughout 2020.

Key Observations and Strategy Insights

Trump’s 2020 return demonstrates the effectiveness of real estate depreciation, business losses, and itemized deductions in eliminating taxable income. His use of the 199A pass-through deduction, which allows for a 20% deduction on business income, is not explicitly outlined but has been a key factor in previous years. The return reflects an aggressive tax strategy designed to defer or eliminate tax liabilities, leveraging the flexibility afforded by real estate investments.

Comparative Policy Analysis: Tax Proposals of 2024

Impact of Policies on Key Demographics

Working-Class Americans

- Trump’s Overtime Pay Proposal: Removing taxes on overtime pay benefits hourly workers, especially in healthcare, manufacturing, and public services. It incentivizes labor supply but may have limited impact if employers reduce overtime availability.

- Harris’s Child Tax Credit: Expanded tax credits help families with young children manage early expenses, providing crucial support for low-income households and potentially reducing child poverty.

High-Income Earners and Investors

- Harris’s Capital Gains Proposal: High-net-worth individuals would see higher tax burdens, particularly those with large portfolios. 

- Trump’s Pass-Through Deduction Extension: Business owners, particularly in real estate and consulting sectors, would continue to benefit from this deduction.

How The Candidates' Policies Impact Their Own Personal Finances

Conclusion: A Strategic Choice for the American Economy

As Americans prepare to cast their votes in 2024, the tax policies proposed by Kamala Harris and Donald Trump reflect two fundamentally different economic philosophies. Harris emphasizes redistribution and long-term investments in social mobility, while Trump focuses on immediate tax relief for workers, retirees, and businesses. Each platform appeals to distinct voter bases and offers varying benefits and risks—from addressing inequality to managing fiscal responsibility.

Ultimately, the choice between these tax strategies will shape the economic future of the United States. 

Voters must consider which strategy aligns best with their priorities for the nation’s future: equity and long-term planning or growth fueled by immediate relief.

At PB Strategies Global Services, we provide the insights needed to navigate complex financial decisions, helping you plan for tomorrow by understanding the economic landscape today.