The Democratic presidential candidates are still fighting over how much to raise taxes and who should pay them, with Bernie Sanders calling for a small raise on middle class Americans to fund programs and Hillary Clinton swearing no increases below $250,000 incomes. But compared to Republican frontrunner Donald Trump, Clinton’s plan is basically the polar opposite.
The heart of Clinton’s tax proposals center on increasing taxes on the wealthiest taxpayers, toughening corporate taxes, and increasing taxes on inheritances and gifts. She announced a “fair tax surcharge” of 4 percent on all income — from both salaries and investments — above $5 million in January, and she also proposes requiring people with incomes over $1 million to pay at least a 30 percent effective tax rate. She wants to raise the capital gains tax rate on investment income, which is currently lower than the rate on ordinary income, and end the loophole for carried interest and other deductions.
Taken together, an analysis from the nonpartisan Tax Policy Center finds, “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.” Specifically, over the first decade nearly 80 percent of her tax increases would fall on the wealthiest 1 percent, while less than 2 percent would fall on the bottom three-fifths of the country. Someone in the 1 percent would owe nearly $120,000 more, while the poorest Americans would owe $6 more. (The Tax Policy Center’s report notes that the campaign has pledged tax cuts for low- and middle-income families that aren’t factored in given that the details haven’t been released.)
That stands in stark contrast to Republican frontrunner Donald Trump’s plan. His proposal — which includes lowering the corporate tax rate and the capital gains rate, reducing the top tax rate paid by the highest income Americans, and ending taxes on inheritances altogether — would overwhelmingly help the rich. Over a decade, the top 1 percent would get more than $400,000 in tax relief, while the poorest would get just $209. The 1 percent captures nearly 40 percent of his tax benefits, while the bottom three-fifths get just 16.4 percent.
Trump’s giveaway to the rich would also be quite costly. The Tax Policy Center has estimated that it would cost the government $9.5 trillion in revenue over 10 years, a far larger bite than tax breaks that were passed by Presidents Reagan and George W. Bush. To make it revenue neutral, while keeping to his promise not to make changes to Social Security and Medicare and implementing all of his other policy preferences, Trump would have to cut all other government spending by more than three-quarters.
The other Republican contenders — Cruz, Rubio, and Kasich — have put forward tax plans that look about the same: the wealthiest would see the biggest benefits under all three, while they would cost trillions in revenue.
Clinton’s, on the other hand, would raise significant amounts of money. The Tax Policy Center estimates that it would raise $1.1 trillion over the first decade and $2.1 trillion over the next. Clinton has promised to spend revenue on infrastructure projects, college affordability, medical research, early childhood education, and other Democratic priorities.
The Tax Policy Center hasn’t run the numbers on Sanders’ plan, although an analysis from the conservative-leaning Tax Policy Foundation found that it would raise revenue by $13.6 trillion over a decade and increase taxes on all income levels, with the heftiest increases for those in the top 20 percent of Americans.
Original Article
Source: thinkprogress.org/
Author: Bryce Covert
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