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Election 2020: Trump vs. Biden on employment, health care and energy taxes

With the election just around the corner, Top 100 Firm Crowe LLP released a roundup of the presidential candidates' tax proposals on a range of topics, including employment, health care and energy.

The summary complements the firm's earlier discussions of their tax policy proposals for individuals and corporate taxes.

The gig economy
Trump: Improve clarity in worker classification and information-reporting requirements with the following:
— Establish a new safe harbor that allows a service recipient to classify a service provider as an independent contractor and require a 5 percent rate of withholding on the first $20,000 of payments.
— Raise the information-reporting threshold for payments to independent contractors from $600 to $1,000.
— Reduce the reporting threshold for third-party settlement organizations from $20,000 and 200 transactions per payee to $1,000 without regard to the number of transactions.

Biden: Tighten the rules for classifying independent contractors by increasing penalties for misclassification.
Payroll taxes
Trump: Forgive payroll taxes deferred under IRS Notice 2020-65, which implements the Presidential Memorandum to the Secretary of the Treasury dated April 8, 2020.

Biden: Raise payroll taxes for workers with more than $400,000 in earnings by increasing the maximum threshold from $137,700 to $400,000 over time.
Trump: Establish a new tax-preferred vehicle for savings.

Biden: Increase tax preferences for middle-income taxpayer contributions to 401(k) plans and IRAs.
— Replace the deduction for worker contributions to traditional IRAs and defined-contribution pensions with a refundable tax credit.
— Provide automatic enrollment in IRAs for workers who do not have a pension or 401(k)-type plan.
— Offer tax credits to small businesses to offset the costs of workplace retirement plans.
— Support informal caregivers by allowing them to make catch-up contributions to retirement accounts, even if they’re not earning income in the formal labor market.
Health care
Demonstrators outside the Supreme Court in advance of the court's rulling that the ACA was constitutional
Trump: Provide Medicare beneficiaries with high-deductible health plans the option to make tax-deductible contributions to health savings accounts or medical savings accounts.
— Provide Indian Health Service health professionals, U.S. Army Nurse Corps members, and participants in Native Hawaiian scholarship and loan repayment programs with a tax exemption in return for an obligatory service requirement.
— Repeal and replace the Affordable Care Act, but retain certain popular protections added by the ACA.

Biden: Increase tax benefits for older Americans who purchase long-term care insurance using their retirement savings.
— Establish a refundable tax credit that would reimburse companies as well as not-for-profit organizations for the extra costs of providing full health benefits to all of their workers during a period of work hour reductions.
— Increase eligibility for the premium tax credit by raising eligibility limits. Also increase the amount of the credit so eligible taxpayers can enroll in more generous health plans.
Renewable energy: Vehicles
Prius electric car plugged in
Trump: Repeal the $7,500 nonrefundable qualified plug-in electric motor vehicle tax credit for vehicles placed in service after Dec. 31, 2020. The credit phases out for a manufacturer’s vehicles over a one-year period beginning with the second calendar quarter after which the manufacturer has sold a cumulative 200,000 qualifying vehicles.

Biden: Make the electric motor vehicle tax credit permanent, repeal the per-manufacturer cap, and phase out the credit for taxpayers with income above $250,000.
Renewable energy: Buildings
Trump: Repeal the accelerated (five-year) depreciation for renewable energy property. The proposal does not state an effective date for repeal.
— Repeal the energy investment credit for construction of property that begins after Dec. 31, 2020.
— Repeal the credit for residential energy-efficient property for property placed in service after Dec. 31, 2020.

Biden: Expand tax deductions for energy retrofits, smart metering systems and other emissions-reducing investments in commercial buildings.
— Reinstate the solar investment tax credit.
— Reinstate tax credits for residential energy efficiency.
Fossil fuel
A gas flare is seen through the window as a Royal Dutch Shell Plc representative drives near Mentone, Texas.
Trump: No proposal.

Biden: Eliminate certain tax subsidies for oil, gas and coal production, including expensing exploration costs and percentage depletion cost recovery rules.
— Enhance tax incentives for carbon capture, use and storage.
— Establish tax credits and subsidies for low-carbon manufacturing.