Comparing The Clinton & Trump Tax Plans

For a PDF of this document click here.

Clinton’s tax reform plan would raise an additional $1.7 trillion over the next 10 years from the wealthy and big corporations, money that would be used to make new investments to create an economy that works for all. Trump’s tax plan would lose nearly $6 trillion; most of the tax breaks he proposes would benefit the wealthy and big corporations.

Unless otherwise sourced this way, all 10-year revenue estimates are from ATF Action Fund’s estimates for Hillary Clinton’s proposals (using Tax Policy Center (TPC), Committee for a Responsible Federal Budget and Clinton campaign estimates) and from TPC’s analysis of Donald Trump’s 2015 Tax Plan, which has changed since it was first published.

 

CLINTON

TRUMP

Taxing the Wealthy Increases taxes paid by the wealthy by $650 billion, raising the taxes paid by the top 1% by $78,000 a year.

·   Limits value of tax deductions (except charitable) to 28% for those in higher tax brackets [$406 billion]

·   Adds 4% surcharge on incomes over $5 million [$126b]

·   Sets a 30% minimum tax rate for taxpayers with income over $1 million (i.e., the Buffett Rule) to ensure that the wealthy pay a fairer share of taxes [$119 billion]

Cuts individual tax rates losing $1.4 trillion, with a significant amount benefitting the wealthy.  

·  Cuts top tax rate from nearly 40% to 33%, giving a tax break of $88,000 a year on average to top 1%.

·  Increases taxes on nearly 8 million mostly low-and middle-income families with children, including more than half of single parents.

 

Taxing Wealth: The Estate Tax Strengthens the estate tax to curb accumulation of dynastic wealth. [$235 billion] Lowers threshold at which estate tax is due to $3.5 million and raises the top rate to 45%. Creates new higher estate tax rates of: 50% on over $10M, 55% on over $50M, and 65% on over $500M. Current estate tax only affects the richest 1 in 500 estates. Eliminates the estate tax, losing $270 billion.

(Reduces lost revenue by requiring wealthy heirs to immediately pay capital gains taxes on inherited assets, with a $10M exemption.) If Trump is worth $10 billion as he claims, his heirs would inherit at least $4 billion more.

Taxing Wealth: Capital Gains Increases capital gains taxes on the wealthy by $234 billion. Requires wealthy heirs to immediately pay capital gains taxes on inherited assets (by ending step-up in basis). [$150 billion] Encourages investors to hold assets longer by extending the holding period to qualify for lower, long-term capital gains rates. [$84 billion] Provides a $192 billion capital gains tax cut to the wealthy. Eliminates the 3.8% tax on investment income above $250,000 per couple under the Affordable Care Act, lowering the top rate to 20%.

(Changes in how inherited assets are valued will reduce the revenue loss).

Taxing Corporations: General Tax Rates Has not announced any corporate tax-rate changes.

·   Eliminates fossil fuel tax incentives [$50 billion]

·   Proposes a fee on financial institutions [$150 billion]

Slashes corporate tax rate by 60%—from 35% to 15%, which loses $2.4 trillion.
Taxing Corporations: Treatment of Offshore Profits Has not announced a position on taxing the $2.4 trillion in existing profits held offshore by multinational corporations. Taxing those profits at the 35% corporate tax rate, less credit for foreign taxes paid, could net up to $700 billion.

·   Raises $275 billion from unspecified business tax reforms to pay for infrastructure investments. Some or all of this is likely the taxation of existing offshore profits.

·   Raises cost and difficulty for companies attempting to lower taxes through various offshore accounting maneuvers such as “inversions” [$92 billion]

Proposes to tax $2.4 trillion in existing offshore profits at a 10% rate, less foreign taxes paid. This would raise about $150 billion—$550 billion less than the up to $700 billion that could be raised from applying the 35% corporate tax rate to those profits.
Taxing Pass-Through Entities: The “Trump Loophole” Closes business tax loopholes on pass-through entities (partnerships, S corps, LLCs) that primarily benefit the wealthy, raising $285 billion.

·   Requires pass-through entities to pay the same 3.8% tax on income above $250,000 per couple that is paid on earned income and income from investments (capital gains, dividends, etc.) above that level. [$250 billion]

·   Eliminates a tax loophole that enables wealthy professionals to avoid payroll taxes by routing their income through a pass-through business. [$35 billion]

May slash the top tax rate on all pass-through entity income to 15%, losing $1 trillion. (Trump’s campaign has offered contradictory information on whether this proposal remains in his plan.) He is the sole or principal owner of 500 pass-through entities. Because he will personally benefit from this tax giveaway, it’s been dubbed the “Trump Loophole.”

 

 

TOTAL Raises $1.7 trillion to pay for new investments Loses about $5.8 trillion

chart

 

0818 TrumpBanner

The Five Worst Features Of Trump’s Newest Tax Plan

For a PDF of this page click here.

Donald Trump has twice revised his original tax plan from 2015 in order to make it appear less fiscally irresponsible and less slanted towards the rich and corporations. But his latest revision would still explode the federal deficit in order to give huge tax cuts to big corporations and wealthy households like his own. Trump’s plan would:

  1. Give multinational corporations with profits stashed offshore a tax cut of up to $550 billion. Big American corporations hold $2.4 trillion in earnings overseas on which they owe up to $700 billion in U.S. taxes. Trump would cut the tax rate on those offshored profits from 35% to just 10%, raising only about $150 billion. This would hand tax-dodging multinational corporations an undeserved tax break of more than half a trillion dollars.
  1. Slash the corporate tax rate by nearly 60%. Corporations are already dodging their fair share of taxes at a time of record profits. Only one in nine dollars of federal revenue now comes from corporate taxes, compared to one in three dollars 65 years ago. Rather than fix the problem of rampant corporate tax dodging, Trump’s plan would make it worse by cutting the corporate tax rate from 35% to just 15%. This would lose $2.4 trillion over the next decade.
  1. Reduce individual income tax rates on the wealthy. Trump adopts a House GOP proposal to cut the top tax rate to 33% (from about 40%), as part of a general lowering and consolidation of tax brackets. Even the conservative Tax Foundation estimates these overall rate reductions will lose $1.4 trillion over 10 years. The richest 1% will get a tax break of $88,000 a year on average. But taxes will be increased on nearly 8 million mostly low-and middle-income families with children, including more than half of single parents. If Trump is as wealthy as he says he is, he could benefit handsomely from this big tax cut.
  1. Likely cuts taxes on hedge funds and other wealthy partnerships by $1 trillion—personally benefitting Trump. Many Wall Street firms, law practices and other big-money outfits incorporate as partnerships and other entities that allow them to pay their business taxes at individual rates. The Trump campaign has offered contradictory information on how he would tax these so-called “pass-through” entities, sometimes indicating that he would continue to tax their income at individual rates, other times that he would cut their rate to just 15%. If he ultimately pursues the latter plan, these wealthy partnerships would avoid $1 trillion in taxes over 10 years. Trump is the sole or principal owner of 500 pass-through entities. He would personally benefit from a massive tax giveaway that’s been appropriately dubbed the “Trump Loophole.”
  1. Eliminate the estate tax to boost the inheritances of millionaires and billionaires—which could give his heirs a $4 billion tax break. Trump would eliminate the federal estate tax, which is only paid by very wealthy families. Just one in 500 estates is affected today, those worth at least $5.5 million. The estate tax is a small curb on the accumulation of dynastic wealth and a key tool in reducing economic inequality. Eliminating the estate tax would lose $270 billion over the next decade (though Trump’s new plan to tax capital gains at death would reduce that loss). Assuming Trump is worth the $10 billion he claims, his heirs could gain $4 billion if the estate tax is repealed.
200052_banner

Revenue Raised Under Hillary Clinton’s Tax Plan

For a PDF of this document click here.

Americans for Tax Fairness Action Fund estimates that Hillary Clinton’s tax proposals will raise $1.7 trillion over 10 years. About $1.5 trillion will come primarily from wealthy individuals. Tax breaks for working families and small businesses costing about $350 billion will net $1.1 trillion from individuals. Corporate tax increases would amount to $566 billion.

2016-2026
$Billions
INDIVIDUAL, ESTATE & SMALL BUSINESS TAXES
28% cap on deductions (except charitable) $406
4% surcharge on Adjusted Gross Income (AGI) over $5 million $126
Buffet Rule (30% minimum tax on AGI over $1 million) $119
Restore estate/gift taxes to 2009 parameters (45% tax above $3.5 M and a $1M lifetime gift exemption); new higher estate tax rates of: 50% > $10M, 55% > $50M, 65% > $500M. [CRFB estimate 1] $235
Pay capital gains on inherited assets like with normal assets and tax those gains at death [Source: CRFB estimate 1] $150
Increase capital gains based on shorter holding period $84
Repeal carried interest, mark derivatives to market, limit deferral in retirement accounts $40
Eliminate fossil fuel tax incentives $9
Expand 3.8% investment surtax to S corporations, limited partnerships, and LLCs [CRFB estimate 2] $250
Limit the use of like-kind exchanges to $1 million per year when the wealthy and businesses sell property [CRFB estimate 1] $35
Close loophole letting small business owners declare wage income as business income to avoid payroll taxes [CRFB estimate 3] $35
Subtotal Revenue Increases $1,489
   
Expand the Child Tax Credit and offer tax breaks to help families pay for child care [CRFB estimate 2] ($150)
Small business tax cuts: Create a standard deduction, quadruple the start-up tax credit, immediately expense up to $1 million in new investments a year [CRFB estimate 2] ($100)
Repeal excise tax on high-cost health plans (paid by employees through benefit cuts and higher cost sharing) [CRFB estimate 4] ($100)
Subtotal Revenue Decreases ($350)
Subtotal Net Revenue from Individuals $1,139
 
CORPORATE TAXES
Unspecified business tax reform [Clinton estimate 1] $275
International — limiting corporate inversions $92
Eliminate fossil fuel tax incentives $50
Fee on Financial Institutions [Clinton estimate 2] $150
Subtotal Corporate $566
TOTAL $1,705

Sources: The Clinton campaign has not released a comprehensive estimate of the revenue its various tax proposals would raise. Proposals have been released throughout 2016 and in some cases have been updated. The estimates above are primarily from the Tax Policy Center, “An Analysis of Hillary Clinton’s Tax Proposals” (March 3, 2016), http://tpc.io/2cEc0EQ

Additional estimates are from the Committee for a Responsible Federal Budget and the Clinton campaign and are noted in the table as:

CRFB 1: “Clinton Proposes New Taxes to Offset New Proposals,” (Sept. 22, 2016), http://crfb.org/blogs/clintons-additional-taxes-wealthy

CRFB 2: “Promises and Price Tags: A Preliminary Update” (Sept. 22, 2016), http://crfb.org/papers/promises-and-price-tags-preliminary-update

CRFB 3: “Analyzing Clinton’s Health and Education Expansions” (July, 27, 2016), http://bit.ly/2dkRZBG

CRFB 4: “Adding up Secretary Clinton’s Campaign Proposals So Far” (May 2, 2016), http://bit.ly/2d9Unw2

Clinton 1: “Hillary Clinton’s Infrastructure Plan: Building Tomorrow’s Economy Today” (accessed Sept. 23, 2016), http://hrc.io/1TCHJqA

Clinton 2: “Investing in America by Restoring Basic Fairness to Our Tax Code” (accessed Sept. 23, 2016), http://hrc.io/1l5OBNo

438,000 Sign Petition Demanding Trump Release His Taxes

WASHINGTON, D.C.–Before Donald Trump’s speech at his new Washington, D.C. hotel today, Americans for Tax Fairness Action Fund (ATFAF) delivered a petition to Trump signed by 438,076 people demanding that he release his federal tax returns. The petition effort was led by ATFAF, CREDO Action, Daily Kos, and MoveOn.org.

Federal tax returns have been publicly released by every major presidential nominee for the last four decades.

The most recent Quinnipiac poll (Q. 48) showed three-quarters (74%) of likely voters said “Donald Trump should publicly release his tax returns” – including Republicans by a two-to-one margin (62% to 31%).

People across the United States signed petitions calling on Trump to release his tax returns. They want and deserve to know how many years Trump did not pay any federal income taxes. (News reports reveal that Trump has not paid federal income taxes in five years since 1978.) They also want to know if and when he does pay federal income taxes whether he’s paying a lower tax rate than middle-class families, what tax loopholes he is taking advantage of, how much he has actually donated to charity to benefit those in need, and how he will personally benefit from his constantly-evolving tax plan, which favors millionaires and billionaires.

“What is Donald Trump hiding in his tax returns?  Why is he so afraid to show them to the American people?” asked Americans for Tax Fairness Action Fund Executive Director Frank Clemente.  “Of all the reasons voters need to know what’s in Trump’s tax returns, the most important might be to learn where he would have conflicts of interest between his business holdings and his responsibilities as president.  How much would his tax policies benefit him and his family? The American people deserve to know.”

In May, Clemente wrote an open letter to Donald Trump raising a number of questions about what is in Trump’s returns and asking him to release them.

The three sets of petitions totaling 438,076 can be viewed at:

ATFAF coalition: https://www.signherenow.org/petition/trump-release-returns/demo/

CREDO Action: http://act.credoaction.com/sign/Trump_Taxes

MoveOn.org: http://pac.petitions.moveon.org/sign/why-is-trump-hiding-his?source=c.em&r_by=5915845

The collection of more than 438,000 petition signatures was done by Americans for Tax Fairness Action Fund, CREDO Action, Daily Kos, MoveOn.org, AFL-CIO, Campaign for America’s Future, Courage Campaign, CPD Action, Deluge, Democracy for America, Left Action, National People’s Action Campaign, People Demanding Action, People for the American Way, RootsAction.org, The Zero Hour, USAction, Watchdog.net, and Working Families.

Trump Speech Offers More of the Same: Huge Tax Breaks to Benefit Billionaires Like Himself

WASHINGTON, D.C.—In response to Donald Trump’s economic speech at the New York Economic Club today, Americans for Tax Fairness Executive Director Frank Clemente made the following statement:

“Yet another Donald Trump tax plan offers more of the same and has conflict of interest written all over it. Never has a U.S. presidential candidate been so wealthy and written a tax plan that contains so many huge tax breaks that he would personally benefit from.

“No wonder Trump refuses to release his tax returns. He’s afraid to be exposed for what he is, out for himself and his rich friends. His tax plan has at least $1 trillion in tax breaks for real estate firms and pass-through entities like the more than 500 he controls. His tax plan is larded with loopholes, like a repeal of the estate tax, that Trump’s heirs will personally benefit from.

“And let’s not forget Trump’s economic advisers, mostly billionaires and millionaires from hedge funds, private equity, banks and real estate. Trump’s tax plan offers them a cornucopia of carve-outs and tax breaks that will make them richer at the expense of everyone else.

“Trump proposes to eliminate the estate tax to boost the inheritances of the families of millionaires and billionaires. His plan to eliminate the estate tax would lose $270 billion over the next decade. His previous plan was originally estimated to give his heirs tax breaks of $4 billion to $7 billion. But his new plan to subject capital gains held at death to tax could significantly lower that windfall. The federal estate tax is only paid by very wealthy families—those worth at least $5.5 million. The estate tax is a small curb on the accumulation of dynastic wealth, and is a key tool in reducing economic inequality.

“Trump plans to give multinational corporations with profits stashed offshore an immediate tax cut of about half a trillion dollars. Big American corporations like Apple, Pfizer and Microsoft, hold $2.4 trillion in earnings overseas. They should be required to bring those profits back and pay the up to $700 billion in U.S. taxes they owe. Trump proposes to have them bring their profits back by slashing their tax rate from 35% to just 10%. This would only raise about $150 billion. This would hand tax-dodging multinational corporations an undeserved tax break of about $550 billion.

“Trump wants to slash the official corporate tax rate by more than half—from 35% to 15%. Corporations already don’t pay their fair share of taxes at a time when they are enjoying record profits. Thanks to loopholes the U.S. tax rate of our profitable large corporations is only 14%, according to a government study. Rather than fix the problem of rampant corporate tax dodging, Trump’s plan would make it worse.

“Once again, Trump has not said how he will pay for these massive handouts to the wealthy and big corporations. It will either go on the government’s credit card or working families and communities will have to pick up the tab in the form of massive cuts to public services. So Trump’s plan actually affects our inequality problem—by increasing it.

For more analysis of Trump’s tax plan by Americans for Tax Fairness Action Fund, and for a comparison of Trump’s tax plan with Hillary Clinton’s tax plan, go here.

New ‘Trump Loophole’ Would Cost $1 Trillion In Lost Federal Revenue Over Ten Years

Republican presidential candidate Donald Trump’s proposal to slash the tax rate on so-called business “pass-through” entities would lose almost $1 trillion in federal revenue over 10 years, according to a recent analysis by a non-partisan think tank. Trump would personally benefit handsomely from this proposal because he appears to derive most of his income from about 500 pass-through entities.

“Once again, we see whose interests Donald Trump would represent if he is elected,” said Americans for Tax Fairness Action Fund Executive Director Frank Clemente. “His huge tax cut for ‘pass through’ entities would cost the American people a trillion dollars in order to benefit the owners of big real estate firms and Wall Street investors, with himself at the front of the line. Instead of paying his fair share to invest in America, Trump is choosing to slash the taxes owed by extremely wealthy people like himself.” Continue reading →

Trump’s New Jersey Sweetheart Tax Deal ANOTHER Reason He Should Release His Tax Returns

Today’s revelation that Donald Trump’s failed Atlantic City casinos dodged $25 million in taxes, thanks to a sweetheart deal from Trump friend and New Jersey Governor Chris Christie, shows another important reason Trump should release his tax returns.

In response to today’s New York Times article on Trump’s tax deal with New Jersey, Americans for Tax Fairness Action Fund Executive Director Frank Clemente made the following statement:

“Sweetheart deals like the failed Trump casinos’ $25-million tax bailout are yet another reason Americans deserve to see Donald Trump’s tax returns.  How often has Trump used his political connections to dodge millions of dollars in taxes? Continue reading →

The Public Deserves to See Donald Trump’s Tax Returns

It is critical that candidates for the highest office in the land release their tax returns. The public deserves to know how candidates conduct their financial affairs, whether they will have conflicts of interest once in office, what tax loopholes they are taking advantage of, and how their proposed tax policies would benefit them personally.

That’s why every major presidential candidate over the past 40 years has publicly released his or her tax returns ahead of the election. While I’m sure none of them wanted the public pouring through their personal finances, all have felt obligated to let the voters see the facts for themselves. Continue reading →

On Tax Policy, Difference Between Clinton and Trump Speeches Was All About Priorities

Following this week’s economic speeches by both Donald Trump and Hillary Clinton, Americans for Tax Fairness Action Fund Executive Director Frank Clemente made the following statement:

“This week both candidates for president claimed their economic policies would serve the middle class, but that’s simply not the case. On tax policy in particular, their proposals offer a clear choice to voters in November.

“Donald Trump highlighted a number of proposals that would exclusively benefit big corporations and wealthy people like himself:  slashing the corporate tax rate by 60%; cutting from about 40% to 15% the top tax rate on business partnerships like the 240 he owns; eliminating the estate tax; reducing the top federal income tax rate and more.  He would even give a $500 billion tax break to multinational corporations that are shifting profits offshore with his proposed 10% repatriation rate on $2.4 trillion in existing offshore profits, rather than make them pay the $700 billion they owe.

“Secretary Clinton correctly framed tax policy as a series of tradeoffs.  She said that while Trump’s proposals would give trillions in tax cuts to millionaires and billionaires, she would rather make them pay their fair share so we can invest in ‘veterans, our kids, our police officers and more.’ She proposed an exit tax on deserting corporations, a surtax on millionaires, and to strengthen the estate tax.

“Ultimately, tax policy is about the allocation of the nation’s fiscal resources. It’s about priorities and tradeoffs. This election is shaping up to give voters a clear choice on these issues, which is critical if we are going to create an economy that works for all Americans.

Despite New Questions of Russian Connections, Trump Continues to Refuse to Release Tax Returns

Washington, D.C. – Despite new allegations about Donald Trump’s business ties to Russia, Trump still refuses to release his federal tax returns, raising even more questions about what he is hiding.

Conservative columnist George Will raised the issue on Fox News, saying Trump refuses to release his tax returns because they may show “he is deeply involved in dealing with Russian oligarchs.” Continue reading →