Hillary’s Trillion Dollar IRS Tax Hikes Will Hit Your Wallet

Hillary Clinton’s candidacy is historic, but her spending is too. Calling Hillary Clinton, the underdog, the Wall Street Journal reported that she has spent $57 million on ads so far. That compares to Trump’s almost laughably small $3.6 million. But Hillary might also be collecting big if she is elected–very big. Many news sources have tallied her proposed tax increases and new taxes. Americans for Tax Reform have also done so here at a dedicated website, HighTaxHillary.com.

How much this all could cost can be debated. Yet her campaigns’ own figures are at least not trying to hide the ball. They suggest that these modest proposals would cost at least $1 trillion over ten years. A key campaign issue is just who gets stuck with paying these increased taxes. A more nuanced issue, regardless of who may nominally pay the taxes, is who actually bears the burden of all those taxes. Those aren’t always the same thing, nor are they always easy to pinpoint.

Clinton and Kaine

Mrs. Clinton has said that she wants to raise taxes at the top, and not on middle income Americans making less than $250,000 a year. Yet, she has said she would be fine with a payroll tax hike on all Americans. She also has endorsed a steep soda tax, and even endorsed a 25% national gun tax. Don’t these everyman taxes violate her pledge? Hillary’s campaign manager John Podesta has also said that she would be open to a carbon tax. Once again, that could impact many people, directly or indirectly.

Even if these ideas don’t come to pass, there are plenty of other Hillary tax hikes to go around. Mostly, they would hit the upper end of the income chart, at least in large part. But not everyone who is going to be paying these is likely to think they are fat cats than can afford it. Just consider these:

  1. Income Tax Hikes. Hillary has proposed a $350 billion income tax hike in the form of a 28 percent cap on itemized deductions. You can think of this as a kind of new version of the alternative minimum tax (AMT). You might think you can deduct something because the law allows it, but not if you make too much money. How much this one will really cost you remains to be seen.
  2. ‘Fairness’ Taxes. Fairness can often be debated in tax matters. Hillary’s published plan calls for “between $400 and $500 billion” by “restoring basic fairness to our tax code.” These proposals include a “fair share surcharge,” the taxing of carried interest capital gains as ordinary income, and a hike in the Death Tax.
  3. Higher Capital Gain Taxes. Hillary proposes higher capital gains taxes. Forget short term and long term. She wants six different rates that climb high.
  4. Stock Trading Tax. The content of Hillary’s still undisclosed Wall Street speeches may have have made Wall Street feel good. But her proposed new tax on stock trading probably won’t. Of course, it won’t only hit Wall Street. It will also hit millions of Americans who buy and sell, even in their 401(k)s and IRAs. It is not yet clear what this one will cost.
  5. Business Tax Hikes. Hillary has also called for a tax hike of at least $275 billion through an amorphous bevy of business tax reforms described in a campaign document. In large part, businesses have to wait for details on this. Just vote for it, and we’ll explain later.
  6. Exit Tax. Hillary has proposed a new “exit tax” on income earned overseas. Her goal is to stop inversions of U.S. companies. Still, many observers say that reducing U.S. corporate tax rates would do considerably more to remove the incentives that make U.S. companies want to invert. In any case, this tax is supposed to raise $80 billion.

Hillary Clinton has made some sweeping tax proposals. If she is elected, she can be expected to push for them to become a reality.

For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not legal advice.

via The Tax Lawyer http://ift.tt/2aH03OE

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