Of the nation's 45 presidents, 15 were vice presidents prior to ascending to the presidency. Thus there is a one-in-three chance, based on past history, that either J.D. Vance or Tim Walz will one day become president. Each has a record that offers insight into their position on a number of tax issues.
"Sen. Vance, with only a short tenure, has been pretty active the last couple of years," said Jorge Castro, a member at Miller & Chevalier Chartered, and co-lead of the law firm's tax policy practice. "He's been very vocal on a number of economic policy ideas. He is very much in line with Republicans on the Tax Cuts and Jobs Act, and in support of business relief provisions including the R&D fix and the qualified business income deduction, so from that perspective he generally falls in line with spending provisions."
"On the other side, he's more open to provisions, such as taxing college endowments," Castro continued. "He also introduced a bill with [Sen. Ron Wyden] to close a perceived tax loophole, so it's clear that while on the one hand he supports traditional tax priorities, he's in the new mold of Republican populist ideas. For example, he supported a bill to stop subsidizing giant mergers, introduced by [Sen. Sheldon Whitehouse]. It's not easy to put Vance into a particular mold — he's capable of going outside the traditional Republican line."
"Gov. Walz's federal policy record stems from being a House member from Minnesota," according to Castro. "He comes from a purple Republican-leaning rural district, so he's not a typical progressive urban House member. He has supported traditional Democrat priorities — middle-class tax relief, raising the standard deduction, and making the Child Tax Credit more refundable. Also he supports making clean energy more affordable, and tax relief for military veterans. The fact that he's from a rural, purple congressional district is indicative of policies he might support going forward."
Specifically, Castro and his team at Miller & Chevalier's tax policy practice make the following points in one of the firm's Tax Flash announcements: "Sen. Vance will tow the line on taxes for President Trump, particularly when it comes to extending or making permanent the Tax Cuts and Jobs Act 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," according to Castro.
In addition, the Miller & Chevalier team noted two of Vance's other legislative efforts:
- S. 3514, the College Endowment Accountability Act, 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% to 35%.
- With Sen. Sheldon Whitehouse, 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.
Gov. Walz's public views on taxes are expected to conform closely to Vice President Harris's platform, according to Castro. As a sitting governor and a member of congress, Walz did the following:
- Signed into law, last year, major reforms that revamped Minnesota's tax regime, including business tax increases, which reduced the net operating loss deduction from 80% to 70% of taxable net income and reduced the dividend received deduction by 30%. It also captured more foreign income by defining and taxing global intangible low-taxed income, similar to the federal regime put in place by the TCJA.
- 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. He also introduced 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.
