Hillary Clinton
Individual tax reform:
1.
Impose the
"Buffett rule" requiring taxpayers earning more than $1 million per
year to pay at least 30% in taxes, and "broadening the base of income
subject to the rule."
2.
Enact the
"Fair Share Surcharge"—i.e., an extra 4% surtax on taxpayers who make
more than $5 million per year.
3.
Modify the
treatment of capital gains for taxpayers in the highest bracket by implementing
a graduated holding period where the rate decreases, from 39.6% to 20%, over a
6-year period, to promote long-term investment.
4.
Limit the tax
value of certain tax breaks to 28%.
Business tax reform:
1.
Restrict
corporate inversions by increasing, from 20% to 50%, the post-merger threshold
of foreign shareholder ownership for an American company to be considered
foreign.
2.
Impose an
"exit tax" on companies that undergo an inversion to ensure that U.S.
taxes are paid on unrepatriated earnings held overseas.
3.
Create a $1,500
"apprenticeship tax credit" for every new worker that a business
trains and hires.
4.
Provide for a
new 15% tax credit for employers that share profits with their workers.
5.
End
"wasteful tax subsidies" for oil and gas companies.
Estate tax reform:
1.
Exempt the
first $3.5 million of an individual's estate from estate tax ($7 million for
married couples), without adjustment for inflation.
2.
Increase the
top rate to 45%.
3.
Cap the lifetime
gift tax exemption at $1 million.
Miscellaneous tax reforms:
1.
End the
"carried interest" loophole (under which private equity and hedge
fund managers are taxed at capital gains rather than ordinary income rates on
fund income).
2.
Close the
loophole under which taxpayers essentially avoid IRA contribution limits by
undervaluing contributed assets, and preventing taxpayers with "mega
IRAs" from contributing further.
3.
"Ask the
wealthiest to contribute more" to Social Security, including "options
to tax some of their income above the current Social Security cap, and taxing
some of their income not currently taken into account by the Social Security
system."
Bernie Sanders
Individual tax reform.
1.
Leave the
existing rates in place for married couples with income below $250,000 and
single filers with incomes below $200,000. However, he would replace the
existing top three rates (of 33%, 35%, and 39.6%) as follows:
a. 37% on income between $250,000 and $500,000;
b. 43% on income between $500,000 and $2 million;
c. 48% on income between $2 million and $10 million; and
d. 52% on income of $10 million and above.
2.
Replace the
alternative minimum tax (AMT), personal exemption phase-out (PEP), and
"Pease" limitation on itemized deductions with a provision limiting
the tax savings for each dollar of deductions to 28¢ for "high-income
households."
3.
Repeal the
favorable rates on capital gains and dividends for married couples with incomes
over $250,000 (which would instead be subject to the otherwise applicable
income tax rate), while retaining the existing favorable treatment for
taxpayers who fall under that threshold. Increase the 3.8% surtax [established by the
Affordable Care Act] on net investment income to 10%.
Business tax reform:
1.
End deferral of
foreign-source income, instead requiring corporations to pay U.S. taxes on
offshore profits as they are earned.
2.
Not allow a
corporation to "claim to be from another country" if its management
and control operations are primarily located in the U.S.
3.
Eliminate
loopholes and subsidies that benefit oil, natural gas, and coal interests.
Estate tax reform:
1.
Exempt the
first $3.5 million of an individual's estate from the estate tax.
2.
Establish a
new progressive estate tax rate structure: 45% on the value of an estate
between $3.5 million and $10 million; 50% for the value of an estate between
$10 million and $50 million; and 55% for the value of an estate in excess of
$50 million, with an "additional billionaire's surtax" of 10%.
3.
Strengthen the
generation-skipping tax by applying it with no exclusion to any trust set up to
last more than 50 years.
4.
Limit the
annual exclusion from gift tax for gifts made to trusts.
Miscellaneous tax reforms:
1.
Enact a
"Wall Street" or "financial transaction" tax on trades of
stock (0.5%), bonds (0.1%), and derivatives (0.005%).
2.
Eliminate the
Social Security wage base (for 2016, $118,500) so that everyone pays the same
percentage of their income.
3.
End the
"carried interest loophole."
4.
Enact a new
payroll tax to fund paid family and medical leave.
5.
Create a 6.2%
income-based health care payroll tax paid by employers, and a 2.2% income-based
tax paid by households (both referred to as "premiums"), to help fund
Medicare for all.
Donald Trump
Individual tax reform:
1.
Lower income tax
rates as follows:
a. 0% for single filers earning up to $25,000, married
filers earning up to $50,000, and heads of household earning up to $37,500;
b. 10% for single filers earning $25,001 to $50,000,
married filers earning $50,001 to $100,000, and heads of household earning
$37,501 to $75,000;
c. 20% for single earners earning $50,001 to $150,000,
married filers earning $100,001 to $300,000, and heads of household earning
$75,001 to $225,000; and
d. 25% for single filers earning $150,000 and up, married
filers earning $300,001 and up, and heads of household earning $225,001 and up.
2.
Change the long-term
capital gains and dividends rates to be:
a. 0% for taxpayers in the 0% and 10% income tax rate
brackets;
b. 15% for taxpayers in the 15% income tax rate bracket;
and
c. 20% for taxpayers in the 25% income tax rate bracket.
3.
Reduce personal
exemptions and deductions.
a. Taxpayers in the 10% brackets will keep "all or
most" of their current deductions,
b. Those in the 20% bracket will keep "more than
half" of their current deductions, and
c. Those in the 25% bracket will keep "fewer"
deductions.
d. Charitable giving and mortgage interest deductions,
will remain unchanged for everyone.
e. Individuals would also be allowed to fully deduct
health insurance premium payments.
Business tax reform:
1.
Cut the corporate
tax rate to 15% and also create a new "business income tax rate"
within the "personal tax code" that would match the 15% corporate tax
rate for pass-through businesses.
2.
Provide a
one-time deemed repatriation of corporate cash held overseas at a 10% rate.
3.
End deferral
of taxes on corporate income earned abroad.
4.
Reduce or eliminate
corporate loopholes that "cater to special interests," as well as
"deductions made unnecessary or redundant" by the new lower rates,
and phasing in a "reasonable cap" on the deductibility of business
interest expenses.
Estate tax reform:
1.
Eliminate the
estate tax.
Miscellaneous tax reforms:
1.
End the current
tax treatment of carried interest.
2.
Repeal the
Affordable Care Act.
