Details and Analysis of Hillary Clinton’s Tax Proposals
- Hillary Clinton would enact a number of tax policies that would raise taxes on individual and business income.
- Hillary Clinton’s plan would raise tax revenue by $498 billion over the next decade on a static basis. However, the plan would end up collecting $191 billion over the next decade when accounting for decreased economic output in the long run.
- A majority of the revenue raised by Clinton’s plan would come from a cap on itemized deductions, the Buffett Rule, and a 4 percent surtax on taxpayers with incomes over $5 million.
- Clinton’s proposals to alter the long-term capital gains rate schedule would actually reduce revenue on both a static and dynamic basis due to increased incentives to delay capital gains realizations.
- According to the Tax Foundation’s Taxes and Growth Model, the plan would reduce GDP by 1 percent over the long-term due to slightly higher marginal tax rates on capital and labor.
- On a static basis, the tax plan would lead to 0.7 percent lower after-tax income for the top 10 percent of taxpayers and 1.7 percent lower income for the top 1 percent. When accounting for reduced GDP, after-tax incomes of all taxpayers would fall by at least 0.9 percent.
Over the past few months, former Secretary of State and Senator Hillary Clinton has proposed a number of new and expanded government programs.[1] In order to pay for these new or expanded services, she has proposed raising and enacting a number of new taxes. Her plan would increase marginal tax rates for taxpayers with incomes over $5 million, enact a 30 percent minimum tax (the Buffett Rule), alter the long-term capital gains tax rate schedule, and limit itemized deductions to a tax value of 28 percent. Her plan would also restore the estate tax to its 2009 parameters and would limit or eliminate other deductions for individuals and corporations.
Our analysis finds that the plan would increase revenue by $498 billion over the next decade. The plan would also increase marginal tax rates on both labor and capital. As a result, the plan would reduce the size of gross domestic product (GDP) by 1 percent over the long term. This reduction in GDP would translate into 0.8 percent lower wages and 311,000 fewer full-time equivalent jobs. Accounting for the economic effects of the tax changes, the plan would end up increasing federal tax revenues by $191 billion over the next decade.
https://taxfoundation.org/article/details-and-analysis-hillary-clinton-s-tax-proposals
