Now that both parties have named their candidates for vice president and the election is in full swing, let's take a look at the tax positions of both candidates. While neither has been particularly focused on tax issues in the past, their prior views will inform the debate now and perhaps in the years ahead. After all, of the country's 45 presidents, 15 previously served as vice president. Statistically speaking, there's a one-in-three chance that Senator J.D. Vance (R-OH) or Governor Tim Walz (D-MN) will be president one day.

Senator J.D. Vance

Senator Vance will toe the line on taxes for President Trump, particularly when it comes to extending or making permanent the Tax Cuts and Jobs Act (TCJA) individual and estate tax relief provisions set to expire at the end of 2025. Vance has co-sponsored bills enacting permanency of particular expiring TCJA provisions, including S. 866, the American Innovation and Jobs Act (retroactively restoring immediate research and development expensing) and S. 1706, the Main Street Certainty Act (section 199A).

Extension of any combination of the TCJA provisions – let alone all of them – will be quite expensive, and a number of bills introduced by Vance during his brief tenure in the Senate could potentially be used as funding mechanisms. He introduced S. 3514, the College Endowment Accountability Act, which would increase the excise tax on the net investment income of private university endowments with assets of at least $10 billion in the preceding taxable year from 1.4 percent to 35 percent. With Senator Sheldon Whitehouse (D-RI), he introduced S. 4011, the Stop Subsidizing Giant Mergers Act, which would treat certain traditional tax-free reorganizations as taxable events if the acquirer and acquired company both have combined annual averages of over $500 million in gross receipts during the three preceding years.

Governor Tim Walz

Like Senator Vance, Governor Walz's public views on taxes are expected to conform to Vice President Harris's platform, which we discussed in more detail last week. It's still worth taking a close look at his track record on tax issues as a sitting governor and a member of Congress.

Last year, Walz signed into law major reforms that revamped Minnesota’s tax regime, including business tax increases. That law reduced the net operating loss deduction by 10 percentage points (from 80 percent to 70 percent of taxable net income) and reduced the dividend received deduction by 30 percentage points. It also captured more foreign income by defining and taxing global intangible low-taxed income (GILTI), similar to the federal regime put in place by the TCJA. Taxpayers with incomes above $1 million were also hit with a 1 percent tax on net investment income.

These and other tax increases directed at businesses and the wealthy helped finance tax cuts and credits for middle- and lower-income residents.

As a congressman, Walz focused his sponsorship of tax bills largely on clean energy-related matters and on providing tax relief to current and former members of the military. Outside of those two areas, one particularly interesting bill he introduced was the Middle Class Tax Fairness Act of 2008, which proposed a package of middle class tax relief (including an increase in the standard deduction and a refundable child tax credit) funded by business-related tax increases (including changes to the taxation of carried interest).

The cynical view is that running mates don't play a big policy role in campaigns. While that is true to some extent, the upheavals of the past month illustrate how fast long-held notions of what is typical can change. #TaxTake

In the News

Jorge commented on the recent failure of a $78 billion tax bill in the Senate (H.R. 7024, the Tax Relief for American Families and Workers Act) and the outlook for the Employee Retention Credit in Bloomberg Tax. "Members of Congress are going to be hard-pressed to just let go of a prominent and sizable revenue raiser."

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