Here's how tax policies proposed by Biden and Trump differ

GEOFF BENNETT: So, as we have said, it is Tax Day, and millions of people are filing last-minute.

What many people may not know is that the clock is ticking on some potentially big changes due in a year that will be decided by the outcome of the 2024 presidential election.

Lisa Desjardins has a closer look at what's at stake.

LISA DESJARDINS: Back in 2017, then-President Donald Trump and the Republican-led Congress enacted sweeping reform, cutting taxes across the board for most individuals and corporations.

But most of those tax cuts are set to expire next year.

That means whoever wins the November election will directly confront whether to extend those cuts or let taxes go up to earlier levels.

Trump and President Joe Biden share some common ground here.

Both would keep cuts in place for households making under $400,000 annually, but they have very different visions beyond that.

Trump would keep all individual and corporate cuts.

President Biden would like to raise the corporate rate from 21 to 28 percent, and Biden's plan would bump up high-income earners from 37 percent to 39.6 percent.

Richard Rubin from The Wall Street Journal tracks this, and he joins me now.

Richard, no one better to help us through this.

And can you set the table here?

These plans mean that, for most of us, there would be no change if either president gets what they want.

But can you help us understand that income group and why politically both candidates want to protect it?

RICHARD RUBIN, The Wall Street Journal: I mean, people don't like to pay more, right?

So people are wanting to keep the tax rates they're used to, right?

These tax cuts have been in place since 2017, and most of us don't really think about comparing what we might pay in 2026 to what we paid in 2016.

It's really about what you're paying now versus what you might pay next year or the year after.

And so both parties, particularly President Biden, is really trying to reassure taxpayers that, for middle-class households, people make -- and anyone making under $400,000, that that's not where he wants to raise taxes.

And so that is really kind of the -- leaving the core of this debate at people making more than that, which is maybe 3 percent of people, but there's a lot of money up there.

LISA DESJARDINS: All right, let's talk about those differences here.

This is a lot of money we're talking about, ultimately, all of these tax cuts, $6 trillion in revenue or so.

President Biden, he wants to raise on higher-income earners and on corporations.

Why does he argue that that's a good idea?

RICHARD RUBIN: He says, look, there's a couple of issues he's trying to address.

He's trying to address budget deficits.

He's trying to address new programs on things like childcare and paid leave that he wants to put in place, restore the expanded child tax credit that was in place in 2021.

And he's looking for ways to pay for those things.

And his argument is that it's more fair, better to take money from those people at the top, and that the 2017 tax cuts were too tilted toward those people.

And so that's really his argument, is that you can achieve a lot of those aims by just taxing people at the very top.

LISA DESJARDINS: Now to former President Trump.

You and I both know, covering Congress, that there is an anti-debt movement that just is seething right now among Republicans on Capitol Hill.

But, nonetheless, they are still pro-tax cut.

And those things don't actually work together.

How does former President Trump argue that we should continue these tax cuts in full, despite the rising tidal wave of red ink?

RICHARD RUBIN: So, they make two points.

One is to look at the economic growth that happened in 2018 and 2019 after these tax cuts were put in place.

They were enacted in late 2017, and 2018 and 2019 were strong years for the economy, in terms of wages, in terms of just the overall growth and investment that we saw.

Now, you can't attribute all of that to the tax cuts, but probably some of it.

The other point that they will argue for is that the issue on debt and deficits is spending, not taxes.

Now, they're really both sides -- two sides of the same coin.

The deficits are the difference between how much we collect as a government and how much we spend.

But they argue that the real focus should be on the spending side and that economic damage comes if you raise taxes.

And so that's -- those are those core philosophies that we have heard from the two parties for many years now, and you're going to hear that throughout the campaign, and then, depending on who wins, you will hear that again throughout 2025 as they're there debating what to do about these tax cuts and this big $6 trillion difference between where the two parties are.

LISA DESJARDINS: Did I hear you correctly that there's mixed evidence on what tax cuts do for the economy?

RICHARD RUBIN: Yes, I think it really depends.

I think there are some tax cuts that economists would say in general can spur some growth.

So some of the pieces of the 2017 tax cut that made it easier and more profitable for companies to invest had some growth effects.

Other things don't necessarily have big growth effects.

In general, when you hear someone claiming that tax cuts have some sort of outsized effect on growth, take that with a grain of salt.

There are -- taxes matter, but maybe not as much as you might think is one way of thinking about that.

LISA DESJARDINS: Something else we should talk about in this realm is the child tax credit.

An estimated 16 million low-income families would really get a boost from that.

There is a bipartisan framework potentially, but it hasn't gone that far.

Is there a chance of Congress passing that this year?

What do you think?

RICHARD RUBIN: So there's this bipartisan bill that came out of the House that would expand the child tax credit, not as large as it was in 2021 or as large as Biden wants, but would really be a boost for those low-income families, particularly with multiple children.

Right now, that looks really stalled in the Senate.

And, if anything, we should take from that a lesson about how difficult 2025 will be.

This is something that is a bipartisan bill that got 357 votes in the House.

Nothing gets 357 votes in the House.

And it's jammed up in the Senate, with Republicans saying they want changes.

So if something that's got that much agreement in the House can't get through the Senate, and it's this big, $78 billion, what happens when you're dealing with something much larger in 2025?

LISA DESJARDINS: In our final moments here, I want to ask you about the IRS in general,.

They say they're still struggling for resources and that they can't really collect all the taxes that they think are out there.

What's the state of the agency right now?

RICHARD RUBIN: So, the agency, I think just like the tax rates, really depends on what happens in this election.

They got that $80 billion in the Inflation Reduction Act in 2022.

Congress has now taken back about $21 billion of that.

So the IRS is going ahead with its plans.

It's expanded customer service.

It's beefing up enforcement, but that takes a while to hire and train and audit.

And then it's really about whether we're going to run out of that expansion money sooner than they had planned.

So, this next Congress, this next president will have some decisions to make about how much further to take that expansion in the IRS, whether to keep putting more money in there or whether to start paring back some of the expansion that President Biden and the Democratic Congress put in place.

LISA DESJARDINS: All right, Richard Rubin of The Wall Street Journal and friend of anyone who wants to understand taxes, thank you for joining us.

RICHARD RUBIN: Thank you.