For voters facing the diametrically different presidential candidates from the Democratic and Republican parties, another factor is now introduced into their decision making: the tax plans of both Republican Donald J. Trump and Democrat Hillary Clinton. According to an analysis by Tax Policy Center, plans made by Trump will add huge amounts of money to federal debt while Clinton’s policies would shave it off. The center is a joint research system of Urban Institute and Brookings Institution.
Incidentally the criticisms made by the institute compelled Trump to rewrite the proposals. Clinton proposed to make twice the present tax break available for parents having young children. Both, however, according to Len Burman of Syracuse University, continue to be diametrically different. Both plans have little chance of being passed by the Congress. Even if Republicans lose the Senate yet control the House, there would be objection from them due to the massive cost resulting from projected growth and size of federal debt. Spending will be higher due to the aging population.
According to the Center, tax cuts by Trump will be deepest, with revenues dropping a massive $6.2 trillion within the first decade. These cuts will benefit exclusively the richest of Americans and the corporations. A few middle class families will suffer a tax rise. Taking interest into account, the total expense will be $7.2 trillion spread over 10 years. It will be almost double the federal debt growth than projected. This cost will be more in the coming decades. Ironically, Trump decries this huge debt at almost every campaign speech.
In contrast, Clinton will increase the taxes imposed on the high income taxpayers- mostly the cream one percent. Taxes will be marginally reduced for low and middle income households. Corporate taxes will be overhauled. If Clinton’s plans come to fruition, then federal revenues will increase by about $1.4 trillion within first decade. It is seen however, Clinton is not keen to lower federal debt, but using money to sponsor education along with other incentives.
President Barack Obama has proposed multiple times the Buffett Rule or minimum tax rate and a cap on deductions. The Buffett rule was named after Warren E. Buffett, the billionaire who supports the Democrat president. As per the present law, majority of income is subjected capital gains tax. There is a 23.8 percent preferential rate in-lieu of the steeper income-tax rates.