Trump Vs. Clinton’s $1 Trillion Tax Hikes

Donald Trump has warned family farmers that a Clinton presidency would mean tax hikes and regulations, but he still faces an uphill battle. There is plenty to complain about in his opponent’s tax plans, but Trump has falsely claimed that she wants to raise taxes on African-American businesses by 50 percent. Some voters may not even want to hear him talk about taxes. He faces criticism from many in his own party that he should be transparent about his own taxes.

Still, his core supporters may not care, and there is plenty for him to attack in Hillary Clinton’s proposed tax increases. The website HighTaxHillary.com from Americans for Tax Reform paints a picture that probably does not frighten Ms. Clinton’s supporters. Plainly, she has made some sweeping tax proposals. If she is elected, she can be expected to push for them to become a reality. Ms. 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.

Hillary-Clinton-and-Donald-Trump-Face-Off-AP-Photos-640x480

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. Ms. Clinton’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.

They suggest that these 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. That is not always easy to pinpoint.

Even if these ideas do not come to pass, Ms. Clinton has proposed plenty of other tax hikes. Mostly, they would hit the upper end of the income chart. But not everyone who is going to be paying these is likely to think they are fat cats than can afford it. She 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.

Ms. Clinton’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. She proposes higher capital gains taxes too. Forget short term and long term. She wants six different rates that climb high. Ms. Clinton’s proposed new tax on stock trading remains controversial. Although its target is Wall Street, its effect could impact 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.

Ms. Clinton has also called for a tax hike of at least $275 billion through a number of business tax reforms described in a campaign  document. In large part, businesses have to wait for details on this. She has also proposed a new “exit tax” on income earned overseas. Her goal is to stop inversions of U.S. companies. Yet 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.

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/2c3mcow

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