Tax Foundation analyzes candidate tax plans!

on . Posted in Election 2016

WASHINGTON (PNN) - October 19, 2016 - The Tax Foundation has an interesting analysis of Trump’s tax plan compared to Clinton’s.

Clinton is negative on GDP, capital investment, wage growth, and jobs. Trump is positive on all four under two different models. Donald Trump’s tax plan would significantly cut taxes, while mostly steering clear of the more difficult task of broadening the tax base. His plan would cut the individual income tax for most taxpayers by cutting marginal rates and expanding the standard deduction. He would cut corporate income taxes by reducing the corporate income tax rate from 35% to 15% and allowing businesses to choose between a deduction for net interest expense and the full expensing of capital investments. His plan would also introduce a number of new childcare expense-related credits and deductions while eliminating both the personal exemption and head of household filing.

Trump’s plan would significantly reduce federal revenues. We estimate that his plan would cut tax revenue by between $5.9 trillion and $4.4 trillion over the next decade, depending on how his plan treats “pass-through” businesses. Most of the revenue loss from his plan comes from his significant individual and corporate rate cuts.

Trump’s plan would also significantly reduce marginal tax rates on work, savings, and investment. As a result, his plan would boost the long-run size of GDP by between 6.9% and 8.2%. The larger economy would mean higher wages (between 5.4% and 6.3%) and an increased level of employment (around 2 million full-time equivalent jobs). The biggest boost to the economy under his plan comes from the much lower corporate income tax rate. The larger economy would end up broadening the tax base and reduce the ultimate cost of his plan. We estimate that his plan would reduce revenues by between $3.9 trillion and $2.6 trillion on a dynamic basis.

Trump’s plan would also make the tax code less progressive than it is today. His tax plan would cut taxes across the board. On average, taxpayers would see an increase in after-tax income of between 3.1% and 4.3%. However, the plan would cut taxes most for those at the top. The top 20% of taxpayers would see an increase in after-tax income of between 4.4% and 6.5% and those in the top 1% would see up to a 16% increase in their after-tax income. Ultimately, taxpayers in all income groups would see an increase in their after-tax income once the economy adjusts to its high equilibrium.

Trump’s tax plan would eliminate many complex features of the tax system, such as the AMT, and many business credits. The elimination of these features of the tax code would make filing simpler for both individuals and businesses. However, his plan to change how pass-through businesses are taxed could add significant complexity to the tax code, depending on the final details of that proposal.

Hillary Clinton would raise taxes, but only on top earners.

Clinton’s plan would raise taxes overall in order to fund new programs. Her plan would significantly raise taxes on high-income taxpayers by enacting a 30% minimum tax called the “Buffett Rule,” a cap on itemized deductions, and a 4% “surtax” on incomes above $5 million. Her plan would also significantly increase the estate tax, especially on very large estates. Her plan would cut taxes for middle-income taxpayers and small businesses. She would expand tax credits for middle- and low-income taxpayers, expand expensing for small businesses, and simplify their taxes.

Clinton’s plan would have the opposite impact on federal collections, but they would be more modest. We estimate that her plan would increase federal revenues by $1.4 trillion over the next decade. All of the next revenue from her plan would come from tax increases on high-income taxpayers.

While Trump’s plan would reduce marginal tax rates, Clinton’s would modestly increase them. Under Clinton’s plan, long-run GDP would be slightly smaller than it otherwise would have been (2.6%). This would reduce long-run wages by 2% and employment by 700,000 full-time equivalent jobs. The smaller economy would somewhat narrow the tax base. As a result, the plan would not raise as much revenue on a dynamic basis. We found that it would end up raising $663 billion over the next decade.

Clinton’s tax proposals would make the Fascist Police States of Amerika tax code more progressive. Clinton would increase taxes by 1.2% on average, but all of the tax increases would fall on the top. The top 20% of all taxpayers would see their after-tax incomes fall by 2.1% and the top 1% of taxpayers would see their after-tax incomes fall by 6.6%. At the same time, Clinton would cut taxes for the bottom 80% of taxpayers mainly by expanding the Child Tax Credit. However, we expect that taxpayers in all income groups would see a decline in their after-tax incomes once the economy has adjusted to its new equilibrium.

In contrast to Trump’s plan, Clinton’s tax plan would make the tax code notably more complex. Her plan would add a new minimum tax, a complex cap on itemized deductions, and a new surtax. Some high-income taxpayers may need to calculate their tax burden multiple times under her plan. She would also introduce a number of new credits for businesses to a system that is already littered with extraneous credits and deductions that benefit narrow groups of taxpayers. Although these additions will most burden high-income taxpayers, they do increase the cost of complying with the tax code.

Clinton’s tax plan is an absolute disaster with expanded tax code, new minimum taxes, and increased tax code complexity.

Eulogies

Eulogy for an Angel
1992-Dec. 20, 2005

Freedom
2003-2018

Freedom sm

My Father
1918-2010

brents dad

Dr. Stan Dale
1929-2007

stan dale

A. Solzhenitsyn
1918-2008

solzhenitsyn

Patrick McGoohan
1928-2009

mcgoohan

Joseph A. Stack
1956-2010

Bill Walsh
1931-2007

Walter Cronkite
1916-2009

Eustace Mullins
1923-2010

Paul Harvey
1918-2009

Don Harkins
1963-2009

Joan Veon
1949-2010

David Nolan
1943-2010

Derry Brownfield
1932-2011

Leroy Schweitzer
1938-2011

Vaclav Havel
1936-2011

Andrew Breitbart
1969-2012

Dick Clark
1929-2012

Bob Chapman
1935-2012

Ray Bradbury
1920-2012

Tommy Cryer
1949-2012

Andy Griffith
1926-2012

Phyllis Diller
1917-2012

Larry Dever
1926-2012

Brian J. Chapman
1975-2012

Annette Funnicello
1942-2012

Margaret Thatcher
1925-2012

Richie Havens
1941-2013

Jack McLamb
1944-2014

James Traficant
1941-2014

jim traficant

Dr. Stan Monteith
1929-2014

stan montieth

Leonard Nimoy
1931-2015

Leonard Nimoy

Stan Solomon
1944-2015

Stan Solomon

B. B. King
1926-2015

BB King

Irwin Schiff
1928-2015

Irwin Schiff

DAVID BOWIE
1947-2016

David Bowie

Muhammad Ali
1942-2016

Muhammed Ali

GENE WILDER
1933-2016

gene wilder

phyllis schlafly
1924-2016

phylis schafly

John Glenn
1921-2016

John Glenn

Charles Weisman
1954-2016

Charles Weisman

Carrie Fisher
1956-2016

Carrie Fisher

Debbie Reynolds
1932-2016

Debbie Reynolds

Roger Moore
1917-2017

Roger Moore

Adam West
1928-2017

Adam West

JERRY LEWIS
1926-2017

jerry lewis

HUGH HEFNER
1926-2017

Hugh Hefner

PROF. STEPHEN HAWKING
1942-2018

Hugh Hefner 

ART BELL
1945-2018

Art Bell

DWIGHT CLARK
1947-2018

dwight clark

CARL MILLER
1952-2017

Carl Miller

HARLAN ELLISON
1934-2018

Harlan Ellison

STAN LEE
1922-2018

stan lee