Clinton proposes tax relief for families with young kids
- by Dan Gutierrez
- in Markets
- — Oct 13, 2016
Democratic presidential candidate Hillary Clinton arrives to speak at a rally at The Ohio State University in Columbus, Ohio, Monday, Oct. 10, 2016.
Donald Trump's proposed tax plan would blow up the national debt over the next decade, while Hillary Clinton would bring it down but fails to return debt to historically much lower levels. But the center found that her plan would offer no alternative benefits for those affected, while under Trump's proposal, hedge funds and private equity partnerships would be able to pay a 15 percent business tax rate - less than the 23.8 percent they now pay under carried interest rules.
The study also found that the Clinton plan would reduce the federal debt by $1.6 trillion over 10 years, because of reduced federal interest costs.
"A tax credit typically benefits lower- and middle-income taxpayers because their marginal tax rates are lower", he said.
Clinton proposes to curb business tax breaks, while retaining the 35 percent corporate rate.
Trump's plan, the center said, would be complicated. But even that analysis found it would leave a net deficit and that more of its benefits would accrue to wealthier taxpayers.
How do these proposals fit into Clinton's broader tax plan? However, the analysts noted that Clinton has proposed new spending that could offset some of the negative economic impact of high-end tax increases.
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But before it began, Trump lobbed another bomb created to change the subject to the Clintons' alleged treatment of women. If Trump is unable to narrow the gender gap, he will be unable to overcome Clinton's lead in the polls.
On a static basis, taxpayers in the top fifth of income would receive tax increases and everyone else would receive tax cuts.
Economists at the Tax Foundation have previously worked with Trump's campaign to help evaluate his tax plan - though last month, that working relationship was strained publicly after campaign officials made conflicting statements regarding one of Trump's signature proposals: cutting taxes on the income of businesses organized as "pass-through" entities. The analysis found Trump would cut the average tax bill by $2,940, or 4.1 percent.
Nearly two-thirds of that revenue would come from the richest 0.1 percent, who would pay an average of $1.1 million more each year, reducing their incomes by nearly 11 percent. He has called for eliminating the estate tax, which Clinton hopes to increase. Individuals and families of all income levels would receive a tax cut of some sort, but the wealthiest one percent would see a tax cut of almost $215,000.
"Literally, he is getting rid of carried interest", said Eric Toder, co-director of the center, which is a collaboration of the Urban Institute and the Brookings Institution.
The Trump campaign has insisted it will create safeguards to ensure this does not happen, but has not explained how. That is, when the credit exceeds parents' taxable income, they can get at least part of it back as a refund. She would also put a 28% cap on itemized deductions, which Cole says may be especially noteworthy.
Trump would consolidate the current seven tax brackets into just three - pegged at 12 percent, 25 percent and 33 percent, while combining the current standard deductions and the personal exemption into a single increased standard deduction of $15,000 for individuals and $30,000 for couples.
"Hard-working, middle-class families are struggling with rising costs for child care, health care, caregiving and college", Clinton said in a press release on the campaign website.
