Tax Foundation: Trump vs. Hillary Tax Plan Comparison
"Donald Trump Would
Cut Taxes Significantly
His plan would cut the individual income tax marginal rates and expand the standard deduction.
He would cut corporate income taxes by reducing the corporate income tax rate from 35 percent to 15 percent and allowing businesses to choose between a deduction for net interest expense and the full expensing of capital investments.
His would introduce a number of new childcare expense-related credits and deductions while eliminating both the personal exemption and head of household filing.
Trump’s plan would significantly reduce federal revenues.
Most of the revenue loss from his plan comes from his significant individual and corporate rate cuts.
Trump’s plan would also significantly reduce marginal tax rates on work, saving, and investment.
As a result, his plan would boost the long-run size of GDP by between 6.9 percent and 8.2 percent.
The larger economy would mean higher wages (between 5.4 and 6.3 percent) and an increased level of employment (around 2 million full-time equivalent jobs).
We estimate that his plan would reduce revenues by between $3.9 trillion and $2.6 trillion on a dynamic basis.
On average, taxpayers would see an increase in after-tax income of between 3.1 percent and 4.3 percent.
The top 20 percent of taxpayers would see an increase in after-tax income of between 4.4 percent and 6.5 percent and those in the top 1 percent would see up to a 16 percent increase in their after-tax income.
Ultimately, taxpayers in all income groups would see an increase in their after-tax income."
"Hillary Clinton Would Raise Taxes,
but Only on Top Earners
Her plan would significantly raise taxes on high-income taxpayers by enacting a 30 percent minimum tax called the “Buffett Rule,” a cap on itemized deductions, and a 4 percent “surtax” on incomes above $5 million.
Her plan would also significantly increase the estate tax, especially on very large estates.
Her plan would cut taxes for middle-income taxpayers and small businesses.
She would expand tax credits for middle- and low-income taxpayers, expand expensing for small businesses, and simplify their taxes.
We estimated that her plan would increase federal revenues by $1.4 trillion over the next decade.
All of the next revenue from her plan would come from tax increases on high-income taxpayers.
Under Clinton’s plan long-run GDP would be slightly smaller than it otherwise would have been (2.6 percent).
This would reduce long-run wages by 2 percent and employment by 700,000 full-time equivalent jobs.
We found that it would end up raising $663 billion over the next decade.
The top 20 percent of all taxpayers would see their after-tax incomes fall by 2.1 percent and the top 1 percent of taxpayers would see their after-tax incomes fall by 6.6 percent.
We expect that taxpayers in all income groups would see a decline in their after-tax incomes once the economy has adjusted to its new equilibrium.
In contrast to Trump’s plan, Clinton’s tax plan would make the tax code notably more complex.
Some high-income taxpayers may need to calculate their tax burden multiple times under her plan.
She would also introduce a number of new credits for businesses to a system that is already littered with extraneous credits and deductions that benefit narrow groups of taxpayers.