A new analysis by the Urban-Brookings Tax Policy Center finds that Democratic presidential nominee Hillary Clinton and her GOP rival Donald Trump continue to move away from one another on taxes, particularly for wealthy families.
The center's study released Tuesday says Clinton would raise taxes by $1.4 trillion over 10 years, mainly by raising taxes on wealthy individuals and curbing business sweeteners. Trump would cut taxes by $6.2 trillion over 10 years, benefiting wealthy families and business."In almost every meaningful respect, these plans are mirror images," said Leonard E. Burman, director of the center, a joint venture of the Urban Institute and Brookings Institution. The center seeks to provide independent analysis.
Clinton proposes to curb business tax breaks, while retaining the 35 percent corporate rate. For families, her plan would create a 28 percent cap on itemized deductions. She would impose a 4 percent surtax on individuals making more than $5 million and a 30 percent minimum tax rate on incomes over $1 million. Clinton proposes a 45 percent estate tax rate, up from 40 percent.
Trump's blueprint mirrors the House GOP's Better Way tax proposal, with a top individual rate of 33 percent. He would create a 15 percent tax rate for businesses and abolish the estate tax.
The analysis examined the candidates' tax plans on their own, without taking into account macroeconomic effects such as the impact on interest rates or productivity, or any new spending initiatives or potential offsets to pay for proposed tax cuts.
The study also found that the Clinton plan would raise reduce the federal debt by $1.6 trillion over 10 years, because of reduced federal interest costs. It found Trump's plan would increase the debt by $7.2 trillion over 10 years because of increased federal interest costs.During a second decade ending in 2036, the study found the Clinton plan would raise $2.7 trillion in additional revenue and reduce the debt by $5.5 trillion overall.
By comparison, the analysis found the Trump plan would reduce revenue by $8.9 trillion and increase the debt by $20.9 trillion overall in the same time period.Burman said the center's analysis incorporated Clinton's new proposal released Tuesday to double the child tax credit to $2,000 for any child up to the age of 4. She proposes to eliminate the $3,000 minimum income threshold before parents could receive the refundable child tax credit.
The study found both candidates would subject the carried interest income of individual investment fund managers to higher individual tax rates, which Clinton and Trump discussed during their debate Sunday night.
Currently, carried interest for investment fund managers is subject to the 20 percent capital gains rate, which is lower.The Tax Policy Center found Trump's proposal would allow hedge funds and certain partnerships to pay a lower 15 percent rate on such earnings.
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