Much like everything else in this campaign, Hillary Clinton and Donald Trump offer opposing policy perspectives on taxes. Trump spoke about the economy on Monday in Detroit while Clinton is scheduled to counter with a speech on Thursday in Warren, Mich., which is in the same metro area as Detroit.
Pulling details from Clinton and Trump websites as well as the Tax Foundation and other sources, here are some differences between the two candidates on the Tax Code.
Trump Tax Plan
Trump on Monday highlighted that his tax plan would change current law to go from seven tax rates down to three: 15%, 25% and 33%. This meshes with the House Republican plan released earlier this year that proposed rates of 12%, 25% and 33%.
Trump campaign did not detail the income levels that would move someone into a higher tax bracket. I asked the Trump campaign if there were details on income levels associated with the separate rates, but did not get a response.
The Tax Foundation examined the House GOP plan earlier this showed a married couple, filing jointly, would be in the following tax bracket levels:
12% - $0 - $75,300
25% - $75,301 - $151,900
33% - $151,901 +
Trump also proposed lowering the 35% corporate tax rate to 15%, which compares with 20% proposed in the House GOP plan. But Trump's plan would also cap some business interest deductions and tax overseas profits.
Rates on long term capital gains under Trump would be 0% to 20%, which is the same as current law. That would differ from the House GOP plan to adjust capital-gains rates to 6%, 12.5% and 16.5%.
Trump's website does not state it, but Trump has frequently declared he would impose import tariffs on U.S. companies of 30% to 35%.
Trump's plan would eliminate the estate tax. The current estate tax exemption is $5.45 million for an individual, or up to $10.9 million for a couple and the top tax rate is 40%.
Affordable Care Act:
Trump would eliminate "Obamacare" early in his administration and along with it the 40% on high-end "Cadillac" insurance plans. Along with that, the 3.8% Medicare surtax on investment income would be eliminated as well.
Clinton Tax Plan
Clinton's campaign focuses on higher taxes for the wealthy. Her first bullet point on her website regarding taxes is a "fair share surcharge" on people making more than $5 million a year. Those higher income people would face a 4% higher tax "surcharge," according to the Clinton campaign.
Clinton would also push to install the so-called "Buffett Rule" proposed by Warren Buffett. Under the rule, households earning more than $1 million a year would have to pay at least an effective rate of 30%. The rule would essentially put a lid on income deductions and tax credits those households could receive.
Clinton's plan would "close loopholes" in various ways. One, Clinton proposes to eliminate "carried interest," which allows hedge-fund and equity managers to be taxed at a lower rate than ordinary income. Her plan also would restrict off-shore and retirement tax shelters used wealthier people to lower their taxable income.
Clinton has not stated whether she supports any change in the corporate tax rate. The campaign website indicates she would push charge an "exit tax" on earnings for companies leaving the U.S. She proposed this as a way to curb corporate "inversions."
Clinton would raise taxes on investments held under six years to a rate ranging from 24% to 39.6%.
The current estate tax exemption is $5.45 million for an individual, or up to $10.9 million for a couple and the top tax rate is 40%. Clinton wants to revert back to 2009 levels with an estate tax exemption of $3.5 million for an individual or $7 million for a couple with a maximum tax rate of 45%. Clinton also proposes to reduce the use of trusts to avoid paying estate taxes.
Affordable Care Act taxes:
Clinton proposes capping premiums under the Affordable Care Act to 8.5% of household income. Clinton also has proposed a tax credit of up to $5,000 for cover health premiums over 5% of income.
Her plan also would keep the 3.8% Medicare surtax on investment income.
While Clinton's website does not address the issue, the Democratic Party platform calls for repealing the excise tax on high-cost health insurance, a/k/a, the 40% tax on "Cadillac" insurance plans, but the party proposes unknown offsets to pay for the elimination of that tax.
MarketWatch had a similar piece highlighting some of the tax proposals for each candidate.
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