Yahoo Finance The one issue Biden and Trump are both eager to talk about during their first debate: Taxes
Most of the top issues up for debate on Thursday are likely to make either President Joe Biden or former President Donald Trump uneasy, but taxes could be a key exception.
Both campaigns appear to be of the mind that it's a winning issue for them based on a wave of expectations-setting from both sides this week. And both are signaling plans to go on offense when it comes up.
Trump, looking to tap into many Americans' dislike of taxes, will tout his plans for a wide array of cuts.
"Who wants to have high taxes?" Trump asked about Biden's plans in a recent podcast appearance, listing it among Biden's "worst policies."
Biden is set to respond by underlining his populist position on the issue and repeating his promise to raise taxes on big corporations and the 1%.
Trump's plan is to give "tax cuts to the ultra-wealthy on the backs of the middle class," read a pre-debate memo from Michael Tyler, the Biden campaign's communications director.
Both sides are not quite as eager to get into other issues.
Read more: 3 ways retirees can save on taxes
The Trump campaign is making clear that the former president will return to the topics of inflation and immigration at every opportunity.
Biden will, of course, have an answer — but he may not be looking to linger and instead may look to neutralize those political vulnerabilities and move on.
The same will likely be true for Trump when the topic turns to issues like abortion rights and defending democracy. Those are top of mind in Biden's campaign, but less so for Trump.
Will it lead to a substantive tax debate?
The broad strokes of the two candidates' tax positions are well known ahead of a mammoth tax debate set for next year, but experts note there is still a lot to learn.
The winner this November will help decide the fate of a range of provisions from the Trump-era tax cuts that are set to expire at the end of 2025.
Biden has often discussed his 2025 plan as focused on renewing provisions from those 2017 cuts that impact Americans making under $400,000 a year while letting the provisions for the rich expire.
Biden also released a budget that pushes for an increase in the corporate tax rate to 28%.
Trump's overall campaign message is a promise for a straight extension of those 2017 cuts and perhaps further reductions.
Trump also floated an array of tax ideas during a recent visit to Washington, including lowering the corporate tax rate to 20% from its current 21% level as well as a long-shot idea to scrap the entire US income tax system in favor of higher tariffs.
But for all the noise around the issue "we haven't seen many specifics on each side's tax policy vision holistically," said Garrett Watson, a senior policy analyst at the Tax Foundation.
He noted that with a few exceptions, the back-and-forth so far has lacked "estimates or specifics on how this would work."
Read more: Tax credit vs. tax deduction: What's the difference and which is better?
The unanswered questions are legion, from specifics of their positions on certain taxes like state and local tax (SALT) deductions, research and development credits, and the earned income tax credit.
And both sides — but Trump in particular — have math problems that could be explored in a debate setting.
Trump's plan to simply extend expiring provisions of the 2017 Tax Cuts and Jobs Act could add $4 trillion to $5 trillion to deficits over the next decade unless cost savings are found elsewhere. Trump hasn't released anything close to a detailed plan on that.
Biden has also promised to extend any tax cuts for Americans making under $400,000 a year, which the Tax Foundation estimates would cost about $2.5 trillion over the next decade.
Biden could pay for that with his proposed tax hikes on the richest Americans and largest corporations but he has also discussed using that money for other priorities.
For whom is it a winning issue?
The unique dynamic around taxes is that both sides clearly think they have the higher ground.
Biden brings up the issue regularly, as he even did recently before a well-heeled audience that had gathered to donate to his campaign.
"The trickle-down economic system didn't work a whole lot," Biden told the audience at a recent fundraising stop in Virginia, adding that "if we just raise the minimum billionaire tax to 25%, it would raise $500 billion over the next 10 years."
Bilal Baydoun, the director of policy and research at the left-leaning Groundwork Collaborative, said in an interview that the focus on the issue is because "people no longer believe" arguments for cutting taxes to grow the economy or for trickle-down economics.
But the strength of conviction is equally strong on the other side. Trump brings it up in front of crowds and behind closed doors.
"I cut your taxes," he said at a recent rally in Wisconsin to cheers, quickly adding a false claim that they were the biggest tax cuts in US history and promising to make them permanent.
Polling has shown that both campaigns are partly right about how they think about this issue; the success of their message often comes down to how it's framed.
A left-leaning group called Blueprint 2024 took a deep dive on the issue in April and came away with the conclusion that tax cuts represent Trump’s "biggest vulnerability."
That poll found Trump’s 2017 tax cuts remain unpopular and that Biden’s message of increased taxes on the rich is "a top-performing message" that resonated with both partisan Democrats as well as moderates.
Media polling of taxes has painted a more nuanced picture.
A CNBC poll from March found a split on the topic, with Biden enjoying a 35-point advantage on the issue of "what corporations pay in taxes" but Trump enjoying a 32-point edge on "what you pay in taxes."
Either way, a Harvard-Harris poll in May found taxes gaining steam as an election-year topic, up 5% over April but still behind top-tier issues like inflation, immigration, and the overall economy.
Ben Werschkul is Washington correspondent for Yahoo Finance.
Read the latest financial and business news from Yahoo Finance
