The 2016 presidential race has been dominated by coverage on polls, tactics and campaigning. Yahoo Finance turned from talking about the size of the candidates’ hands to the size of their tax plans.
“You wouldn't be surprised by Trump building the biggest, the gaudiest, the grandest of anything. And this applies to his tax plan as well,” said Yahoo News political consultant Brian Goldsmith. “Despite his rhetoric about sticking it to Wall Street, his plan would actually be a pretty big boon to the top one percent.”
Trump’s tax plan would significantly reduce marginal tax rates on individuals and businesses and increase standard deduction amounts.
While Trump has incited anger around the fact that the United States is poor, his plan would reduce federal revenues by about $10 trillion over its first decade, according to the Tax Policy Center, a non-partisan research outfit, increasing the national debt by nearly 80% of gross domestic product by 2036.
Speaking of tax plans being a reflection of the candidates propose them, Hillary Clinton’s plan is “cautious,” “complex,” “incremental” and “very much a continuation of President Obama’s policies,” Goldsmith said.
Clinton’s tax plan includes a modest tax increase for people who make more than $5 million a year, a modest increase in the estate tax, and some measures to increase college affordability. Her campaign says that an additional middle class tax cut may be forthcoming.
“But it's a plan that very much reflects the attitude of the candidate, which is policy over politics. It can’t easily be reduced to a slogan or a bumper sticker,” Goldsmith said.
Clinton’s plan would increase revenue by $1.1 trillion over the next decade, according to the Tax Policy Center, and nearly all of the tax increase would fall on the top 1%.
Ted Cruz’s tax plan “represents probably the most radical departure from the current code,” said Goldsmith.
Cruz is looking to collapse the seven individual tax rates to a single 10% rate. Meanwhile, his proposal would also repeal the corporate income tax, payroll taxes for Social Security and Medicare, and estate and gift taxes. He would then introduce a new 16% broad-based consumption tax. Federal tax revenues would decline by $8.6 trillion over a decade, according to Tax Policy Center.
“His plan actually represents the biggest boon to the wealthy of any of these plans. But it's a tax cut that's very broad-based,” Goldsmith said.
Bernie Sanders, whose candidacy has been largely fueled by appealing to upset about inequality has a tax plan to back that up.
Sanders’ tax plan “represents probably one of the biggest tax increases in American history,” said Goldsmith.
Sanders’ proposal includes increases in federal income, payroll, business and estate taxes, along with new excise taxes on carbon and financial transactions. In some cases, rates would be raised to rates well above historical levels in the U.S.
According to the Tax Policy Center, Sanders’ plan would raise $15 trillion over the next decade, with most coming from high-income households.
The bottom line: And the next president is going to represent either a radical shift from the current administration or, in the case of Hillary Clinton, a continuation of it.