As the presidential election of 2016 draws near do you know where each candidate stands on their tax policy proposals?  Although we are unsure whether either candidate will actually get their suggested proposals passed, there have been some candidates who historically get a good part of their proposals through Congress when they are elected simply because the party of the candidate who wins in a first term presidential spot, following an outgoing president, usually becomes the majority in Congress.  So for educational purposes, we have outlined the tax policy proposals for each candidate to give you some perspective.

Tax Plan Under Hillary Clinton

  • Hillary Clinton wants to enact a number of tax policies that would raise taxes on individual and business income, including the “Buffet Rule” where the wealthiest Americans should have to pay a higher effective tax rate of 30%, and capital gains rates. She would leave the corporate tax rate alone.
  • A majority of the revenue raised by Clinton’s plan would come from a cap on itemized deductions, and a 4 percent surtax on taxpayers with income over $5 million.
  • Clinton’s proposal includes permanently lowering the tax threshold for estates from $5.4 million to $3.5 million for individuals and from $10.9 million to $7 million for married couples.
  • The Clinton Plan would eliminate the “carried interest: provisions that has allowed hedge funds and private equity accounts to pay a tax rate on their profits far below the rate that most Americans pay on ordinary income.

The analysis from, finds Hillary Clinton’s plan would increase revenue by $498 billion over the next decade. The plan would also reduce GDP by 1 percent over the long-term translating to 0.8 percent lower wages and 311,000 fewer full-time equivalent jobs. Accounting for the economic effects of the tax changes, the plan would end up increasing federal tax revenues by $191 billion over the next decade.

Tax Plan Under Donald Trump

  • Trump’s tax plan would substantially lower individual income tax rates to 25% (lowest level since 1931) and cut maximum rates on capital gains and dividends to 20% from 23.8%. And he would lower the corporate income tax rate to 15% and offer a special tax rate of 15% to business.
  • The plan will eliminate the Estate Tax and Alternative Minimum Tax.
  • The plan would lead to 6.5% higher wages, and 5.3 million more full-time equivalent jobs.
  • The plan would cut taxes and lead to higher after-tax income for taxpayers at all levels of income.

According to Mr. Trump’s plan would cut taxes by $11.98 trillion over the next decade. However, the plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital. The plan would also significantly reduce marginal tax rates and the cost of capital, which would lead to an 11 percent higher GDP over the long term provided that the tax cut could be appropriately financed.