Monday, September 26, 2016

Time to Compare Candidate's Tax Plans Again!

On July 19, 2016 we posted Time to Compare Candidate's Tax Plans!  where we discussed both the Clinton Tax Plan and the Trump Tax Plan. Now with the first debate on the horizon, we thought it would be a good time to revisit their tax positions.
        Clinton Tax Plan

Hillary Clinton proposes raising taxes
on high-income taxpayers, modifying
taxation of multinational corporations, repealing fossil fuel tax incentives, and increasing estate and gift taxes.

  • Her proposals would increase revenue by $1.1 trillion over the next decade.
  • Nearly all of the tax increases would fall on the top 1 percent; the bottom 95 percent of taxpayers would see little or no change in their taxes.
  • Marginal tax rates would increase, reducing incentives to work, save, and invest, and the tax code would become more complex.
  • The analysis does not address a forthcoming proposal to cut taxes for low- and middle-income families.

His plan would significantly reduce marginal tax rates on individuals and businesses, increase standard deduction amounts to nearly four times current levels, and curtail many tax expenditures.  
  • His proposal would cut taxes at all income levels, although the largest benefits, in dollar and percentage terms, would go to the highest-income households. 
  • The plan would reduce federal revenues by $9.5 trillion over its first decade before accounting for added interest costs or considering macroeconomic feedback effects.
  • The plan would improve incentives to work, save, and invest.
  • However, unless it is accompanied by very large spending cuts, it could increase the national debt by nearly 80 percent of gross domestic product by 2036, offsetting some or all of the incentive effects of the tax cuts.

Candidates Differ on Taxing Corporations

The corporate income tax is a major revenue source for the U.S. government, but it has been shrinking for decades, and the three main presidential candidates could not differ more dramatically on what to do about it.

Trump Plan

Donald Trump, the Republicans' nominee for the Nov. 8 election, wants to cut the corporate tax rate from 35% to 15%.

While the Tax Policy Center, a Washington D.C. based tax research group, has said that under Trump's plan, corporate income tax revenues would fall $1.9 trillion from 2016 to 2026, Trump, a real estate developer, described his proposals as revenue neutral, saying that reduced tax rates would be paid for by eliminating some tax breaks and repatriating corporate cash held overseas.

Steven Rosenthal, a Tax Policy Center senior fellow, said Trump's plan is a standard business focused approach, but notes that it was difficult to fully evaluate because the drafting was incomplete.

Clinton Plan
Hillary Clinton,  has not promised a corporate tax cut. Like Trump, she has called for closing loopholes that corporations use to avoid taxes.

But unlike Trump, her plan would raise corporate tax revenues by $136 billion over 10 years, the Tax Policy Center said.
This fact sheet has been updated to reflect additional Clinton proposals to make sure the wealthiest pay their fair share.Clinton stood side-by-side with Warren Buffett and spoke about the importance of tax fairness.
Now, she is offering a plan to build on the “Buffett Rule,” crack down on tax gaming and sheltering, and ensure that the super-wealthy pay their fair share by:
  1. Implementing a multi-millionaire “Fair Share Surcharge.” Hillary will call for imposing a 4 percent “Fair Share Surcharge” on the 2 out of every 10,000 taxpayers making more than $5 million per year – who are the most likely to benefit from tax planning. This surcharge is a direct way to ensure that effective rates rise for taxpayers who are avoiding paying their fair share, and that the richest Americans pay an effective rate higher than middle-class families.
  2. Shutting down the “private tax system” for the most fortunate, starting by immediately closing egregious loopholesHillary will call for strengthening the Buffett Rule by broadening the base of income subject to the rule. This means immediately closing egregious loopholes, like the Bermuda reinsurance loophole and the “Romney loophole” that let the most fortunate avoid paying their fair share. That also means closing the “step up in basis” loophole, which lets the highest-income Americans escape paying their fair share on assets passed to heirs.
  3. Restoring fair taxation on multi-million dollar estatesHillary is proposing to restore the Estate Tax to 2009 parameters, which would ensure some of the largest, multi-million dollar estates are not exempt from paying their fair share. And she would go beyond that for estates valued in the tens or hundreds of millions of dollars. She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are. The Estate Tax is a tax on the very largest estates that would only affect 4 out of every 1,000 estates after Clinton’s reforms. 
  4. Ensuring millionaires can no longer pay a lower rate than their secretary. Hillary will reiterate her call for the “Buffett Rule,” which ensures that those making more than $1 million per year pay at least an effective tax rate of 30 percent.
 Have a Tax Problem?
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or Toll Free at 888-8TaxAid (888 882-9243).



  1. Clinton will return US estate tax to 2009 levels with no step-up

    Monday, 26 September, 2016

    Hillary Clinton's tax manifesto, published last weekend, proposes major reforms to the US federal estate tax.

    Her plan is to treat bequests as a realisation event. 'She will close the step-up-in-basis loophole that lets accumulated capital gains go untaxed when assets are passed on to heirs', says her presidential campaign website. However, it will also contain 'exemptions, protections and flexibility for small and closely-held businesses, farms and homes, and personal property and family heirlooms'.

    She wants to return federal estate tax to the 2009 level of 45 per cent, an idea already backed by outgoing president Barack Obama. But she also proposes a new 65 per cent top rate on estates valued at over USD1 billion per couple, and an estate tax exemption lowered from USD5.45 million per person to USD3.5 million. 'Her plan would also crack down on loopholes in the estate tax, including methods that people can now use to make their estates appear to be worth less than they really are', says her website.

    Action against tax avoidance is a key theme of her tax manifesto. 'Hillary is committing to shutting down the private tax system for the ultra-wealthy, by closing loopholes that exist today, and remaining vigilant for new loopholes lawyers and accountants try to find next', says her website. Examples of 'loopholes' to be closed include 'the Bermuda reinsurance loophole'; the 'private equity carried interest loophole'; and the use of tax-advantaged retirement accounts.
    Clinton also proposes to impose a 4 per cent income tax surcharge on individuals earning more than USD5 million per year.

  2. Trump Tax Plan May Boost Economy, But Only In Short Term
    Donald Trump's tax plan could boost the economy in the short term even while cutting into U.S. gross domestic product in the long run by driving up debt, according to an analysis released Monday that found virtually the exact opposite for Hillary Clinton's tax plan.