How Trump and Clinton Tax Plans Would Affect Americans | NBC Southern California
National & International News
The day’s top national and international news

How Trump and Clinton Tax Plans Would Affect Americans

Tax policy is one of the issues on which the two nominees differ most

    processing...

    NEWSLETTERS

    AP
    Republican presidential nominee Donald Trump and Democratic presidential nominee Hillary Clinton shake hands during the presidential debate at Hofstra University in Hempstead, N.Y., Monday, Sept. 26, 2016.

    For America's wealthiest families, the presidential campaign presents a stark choice: A big tax increase if Hillary Clinton wins the election — or a big tax cut if Donald Trump wins.

    For everyone else? Right now, neither candidate is proposing major tax changes.

    Tax policy is one of the issues on which the two nominees differ most. Their approaches are likely to draw new attention in the wake of a New York Times report that Trump's nearly $916 million in losses in 1995, according to tax records the paper received anonymously, means he may not have paid federal income taxes for as many as 18 years.

    On trade, Clinton has backed off her previous support for free trade agreements and, like Trump, now opposes the Trans-Pacific Partnership, a pact involving the U.S. and 11 other nations.

    Trump Booed Leaving New York Times

    [NATL] Trump Booed Leaving New York Times
    President Elect Donald Trump is booed as he walks through the lobby of The New York Times Building after a 75-minute meeting with Times journalists. The lobby of the Times building is open to the public, and a large crowd had gathered by the time he departed. (Published Tuesday, Nov. 22, 2016)

    Trump has said he will spend twice as much on building and repairing roads, airports and other infrastructure as Clinton would.

    On trade and infrastructure spending, Trump has taken a populist approach that jettisons Republican orthodoxy. But on taxes, his proposed tax cuts for individuals and businesses are more in line with previous Republican candidates and elected officials. After two previous tries, he provided more details on his tax plans in a speech in New York last week — although he left one key component unclear.

    Clinton, for her part, is proposing to raise taxes for the wealthiest households to pay for traditional Democratic proposals such as expanding access to higher education.

    "Here, at least, they fall into very much traditional Democratic and Republican proposals," said William Gale, co-director of the Tax Policy Center, a joint project of the Brookings Institution and Urban Institute.

    Trump Takes Meetings at His New Jersey Golf Club

    [NATL] Trump Takes Meetings at His New Jersey Golf Club
    President-elect Trump interviewed more than a dozen candidates for his administration at his New Jersey golf club over the weekend, including Mitt Romney, Rudy Guliani, Chris Christie and Kansas secretary of state Kris Kobach, who has been tough on immigration, and others. (Published Monday, Nov. 21, 2016)

    On taxes, the two candidates remain far apart. Here are summaries of their proposals: 

    TAXES ON HIGHER INCOMES

    TRUMP: He would cut the top income tax bracket to 33 percent from its current level of 39.6 percent. Republican House Speaker Paul Ryan has made the same proposal, which the conservative Tax Foundation said would help boost after-tax income for the wealthiest 1 percent of Americans by 5.3 percent. Trump would also cap tax deductions at $200,000 per household.

    CLINTON: She is proposing several tax increases on wealthier Americans, including a 4 percent surcharge on incomes above $5 million, effectively creating a new top bracket of 43.6 percent. And those earning more than $1 million a year would be subject to a minimum 30 percent tax rate. She would also cap the value of many tax deductions for wealthier taxpayers. All the changes would increase taxes in 2017 for the richest 1 percent by $78,284, reducing their after-tax income by 5 percent, according to the Tax Policy Center. 

    TAXES ON MIDDLE INCOMES

    TRUMP: Would reduce the seven tax brackets in current law to three, at 12 percent, 25 percent and 33 percent. He'd also raise the standard deduction to $15,000 for singles and $30,000 for households.

    CLINTON: Says she will not raise taxes on the middle class. Her current proposals would have little impact on the bottom 95 percent of taxpayers, according to the Tax Policy Center.

    CORPORATE TAX RATE

    Trump Holds Series of Meetings With Potential Cabinet Candidates

    [NATL]Trump Holds Series of Meetings With Potential Cabinet Candidates
    President-elect Donald Trump is holding a series of meetings all weekend with potential candidates at his New Jersey golf course as he continues to mull over dozens of positions in his upcoming administration. NBC's Chris Pollone reports. (Published Saturday, Nov. 19, 2016)

    TRUMP: Would cut the corporate rate from its current 35 percent to 15 percent. It's unclear however, if he'd allow "pass through" corporations, which pay taxes on revenue as personal income, to claim the 15 percent rate. Doing so would cost an extra $1.5 trillion, according to the nonpartisan Tax Foundation, which supports lower tax rates.

    CLINTON: Would not change the corporate tax rate. 

    "CARRIED INTEREST" LOOPHOLE

    TRUMP: Managers for private equity firms and hedge funds can classify their investment profits as "carried interest" and pay capital gains taxes on their income at rates that can be as low as half the regular income tax rate. Trump says he would eliminate the loophole, but hedge fund and private equity managers would be able to pay even lower tax rates should Trump let pass-throughs enjoy his lower 15 percent rate.

    Clinton Reflects on Defeat: 'Never, Ever Give Up'

    [NATL] Clinton Reflects on Defeat: 'Never, Ever Give Up'
    Hillary Clinton is reflecting on her devastating defeat, acknowledging the difficulty of her loss for her supporters and urging them to persevere through the Donald Trump era. She is encouraging her backers to "never, ever give up."

    Making her first public appearance Wednesday evening since her emotional concession speech a week earlier, Clinton said: "It's up to each and every one of us to keep working to make America better and stronger and fairer." (Published Thursday, Nov. 17, 2016)

    CLINTON: Would eliminate the loophole and tax carried interest as ordinary income. 

    ESTATE TAXES

    TRUMP: Would eliminate the so-called "death tax" that is currently levied on estates worth more than $5.45 million ($10.9 million for married couples).

    CLINTON: Would increase the estate tax to 65 percent from 40 percent and apply it to more estates, starting with those worth $3.5 million ($7 million for married couples).

    CORPORATE INVERSIONS

    TRUMP: Argues his steep cut in the corporate tax rate would end the practice of corporate "inversions," which occur when a U.S. company acquires a foreign corporation, then relocates overseas, to avoid paying U.S. corporate taxes. The U.S. corporate tax rate of 35 percent is the highest in the developed world, though many companies use deductions and other strategies to avoid paying that amount. Trump would only tax repatriated corporate money at 10 percent to incentivize businesses to bring it back into the country.

    CLINTON: Would discourage inversions by making it harder for a U.S. company to classify itself as a foreign-owned to avoid U.S. taxation. She would also place an "exit tax" on companies that leave the U.S. while still keeping earnings overseas that haven't been subject to U.S. tax. 

    CHILD CARE

    WATCH: Obama Welcomes Trump to the White House

    [NATL] WATCH: Obama Welcomes Trump to the White House
    President Barack Obama welcomed President-elect Donald Trump to the White House Thursday for a private meeting in the Oval Office. After spending roughly 90 minutes together the pair made a brief statement to reporters. Obama said he was "encouraged" by the wide-ranging conversation the pair had, adding that it's important "we call come together" to face the challenges America faces. Trump added that he "very much looks forward" to dealing with President Obama in the future and will rely on his "counsel" (Published Thursday, Nov. 10, 2016)

    TRUMP: Wants to make child care costs tax-deductible, subject to caps based on income and the average price of childcare in a state. It would apply to stay-at-home parents as well. Would expand the Earned Income Tax Credit to benefit lower-income earners who pay little or no income tax. Current law allows parents to claim a credit of up to $6,000 for child care expenses. He'd also let families put aside money in tax-exempt accounts to pay for child care.

    CLINTON: Has made several proposals intended to help limit child care expenses to 10 percent of a family's income through a combination of expanded government spending and unspecified tax credits.