2016 Presidential Candidates: What U.S. Taxes Would Look Like

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Tax season is here, and the field of 2016 presidential candidates is narrowing. What better time is there to see what taxes would look like under a presumptive administration of the remaining candidates?

2016 Presidential Candidates: What Taxes Would Look LikeDemocrat or Republican, a top concern for voters in the presidential race is the economy. And taxes are certainly at the heart of the U.S. economic debate, as well as the center of passions for voters on all sides of the political discussion.

Whether you are completely undecided on which of the presidential candidates will receive your vote, or if you are teetering on the fence between two of them, a primer on each of their plans for taxes can be a good place to begin or end the decision.

Taxes and the 2016 Presidential Candidates

Here we’ll cover the basic tax ideas and policies for each of the remaining major candidates, who are Donald Trump, Ted Cruz, Marco Rubio, Jeb Bush, Ben Carson and John Kasich on the Republican side and Hillary Clinton and Bernie Sanders for the Democrats.

  • Donald Trump: The general goals of Trump’s tax reform ideas include middle-class tax relief, tax code simplification and growing the economy with more jobs and less corporate inversions. More specifically, Trump’s tax relief and simplification would mean single filers earning less than $25,000 and those married filing jointly under $50,000 would pay no tax. The seven current tax brackets would be cut to four — 0%, 10%, 20%, and 25%. And no business, no matter how large or small, would pay more than 15% for business taxes. Trump says his tax plans are revenue neutral and would be paid for primarily by reducing or eliminating tax loopholes available to corporations and the very rich.
  • Ted Cruz: Tax plans for a Cruz presidency center around his simple flat tax, which he claims would create almost 5 million jobs. Cruz would collapse the seven current tax brackets into one single rate of 10%. For a family of four, the first $36,000 of income would be tax-free. According to the Cruz jobs and taxes plan, “the IRS will cease to exist as we know it, there will be zero targeting of individuals based on their faith or political beliefs, and there will be no way for thousands of agents to manipulate the system.”
  • Marco Rubio: Like Trump’s and Cruz’ tax plans, the Rubio tax plan cuts tax rates while simplifying the tax code. To do this, some of Rubio’ ideas include a reduction of the seven tax brackets down to three, elimination of all itemized deductions, the creation of a new refundable tax credit ($2,000 for single filers and $4,000 for married filing jointly), elimination of the marriage penalty and Alternative Minimum Tax (AMT), the reduction of tax rates of all businesses to 25%, and the reduction of capital gains rates, dividends and estate taxes to 0% each.
  • Jeb Bush: The tax plan for Jeb Bush also looks similar to those of the other Republican candidates. He promises to simplify the tax code and reduce taxes, which Bush claims “will unleash increased investment, higher wages and sustained 4% economic growth, while reducing the deficit.” For example, he would reduce tax brackets down to three — 10%, 25% and 28%. His plan would also nearly double the standard deduction taken by about two-thirds of filers and end the marriage penalty and AMT. He would also work to end corporate inversions, cut the corporate tax rate to 20% and allow businesses to immediately and fully deduct capital investments.
  • Ben Carson: Simplicity, transparency and fairness are highlights of the Carson-proposed tax reforms. Carson would replace the current tax code with what he calls a “true flat tax,” which would tax all income at one 14.9% rate. However tax payers at or under 150% of the Federal Poverty Level would not pay the 14.9% rate but would pay a “de minimis” annual tax payment. Carson would also end double taxation of capital gains, eliminate the death tax and end the AMT.
  • John Kasich: Cutting taxes on families and businesses is one of the primary Kasich action plan items on the agenda for his first 100 days in office. At the core of the Kasich tax plan, like the other Republican candidates, is to simplify the tax code by reducing the tax brackets down to three, with the top rate pegged at 28%, which is where it was under Ronald Reagan. On the business side, Kasich would reduce the top corporate tax rate from 35% down to 25%. He would also launch a thorough review of the IRS and tax code to find ways to reduce barriers to business and end political favoritism.
  • Hillary Clinton: The basics of the Clinton plan include tax relief for working families and the closing of corporate tax loopholes. She proposes extending a tax cut of up to $2,500 per student to help with college costs and tax cuts to businesses that share profits with employees,. Also, she would enact the “the Buffett Rule,” which would ensure that the wealthiest of business owners do not pay taxes at lower effective rates than their secretaries. Although her plan mentions no specifics capital gains taxes, she would reform these taxes to focus on long-term investment instead of the short term.
  • Bernie Sanders: At the center of the Sanders platform is income and wealth inequality, which says “there is something profoundly wrong when the top one-tenth of one percent owns almost as much wealth as the bottom 90 percent.” Some of the ways a President Bernie Sanders would combat this economic imbalance would include measures to stop the shifting of U.S. jobs overseas, a tax on the top 0.3% of Americans who inherit over $3.5 million, lifting the Social Security cap on taxable income above $250,000 and a tax on “Wall Street speculators.”

A Few More Words on the Candidates and Their Tax Plans

Although this brief article on the 2016 presidential candidates and their plans for taxes is probably more detailed than most of what you’ll see in the presidential debates, it’s still just an overview of what you’ll find by looking at each candidate’s respective website. Be sure to be an informed voter by visiting these sites, each of which is linked within this article.

And for one piece of unsolicited advice, be sure to remember that U.S. presidents can’t pass tax reform laws without Congress.

Kent Thune is the owner of a privately held investment advisory firm in Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.


Article printed from InvestorPlace Media, https://investorplace.com/2016/02/2016-presidential-candidates-taxes/.

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