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A Non-Partisan Comparison of Presidential Candidate Tax Plans

Just over a month away is the election for the 45th President of the United States. No matter which side of the aisle you find yourself on, there is no doubt that each candidate has proposed some substantial tax legislation changes. Here is a comparison of the candidates tax plans:

Hillary Clinton’s Plan:  

• “Fair Share Surcharge” – A proposed 4% increase to the top tax rate of 39.6% for individuals making over $5,000,000 per year. All other tax rates for individuals would remain constant.

• Closing loopholes – Strengthening the Buffet Rule and broadening the base of income subject to the rule, closing Bermuda reinsurance loophole and the “Romney Loophole”, and closing the “step up in basis” loophole.

• Closing the “Carried Interest” Loophole – Loophole which allows hedge fund managers to avoid ordinary income tax rates for earnings.

• Restore Estate Tax to 2009 Parameters($3,500,000 Estate exemption, 45% tax rate) with rates increasing to as much as 65% on estates over 1 billion.

• Ensure millionaires pay a minimum tax rate of 30%.

• Impose a “risk fee” on the largest financial institutions.

• Corporate tax rate will remain at 35%.

 

Donald Trump’s Plan:

• Reduce tax rates for individuals from 12% for Married Filing Jointly (MFJ) filers under $75,000, to a maximum of 33% for MFJ filers over $225,000. Single filers would be half of these numbers.

• Retain current capital gains rates(max of 20%).

• Repeal net investment income tax of 3.8%.

• Increase standard deduction to $30,000 for MFJ, and get rid of personal exemptions.

• Cap itemized deductions at $200,000.

• Repeal Estate Tax unless capital gain assets valued over $10,000,000 were held until death, disallow private established charity donations.

• Above-the-line deduction for childcare for children under 13, capped by states per child. Not available to MFJ taxpayers over $500,000.

• Spending rebates for childcare expense to certain low-income taxpayers through the Earned Income Tax Credit (EITC).

• Cut corporate tax rate from 35% to 15%, and provide 1 time repatriation of offshore funds for a 10% tax rate.

 

Each tax plan is diametrically opposed from the other, but both will change the tax planning efforts that accountants will need to have to properly advise clients in the coming years. To view the tax plans in full detail, click on each candidates name to connect to their websites.

 

 






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