The Hillary Clinton tax plan
Certain commenters keep on insisting that the Democrat party is secretly using taxes to protect the richest of the rich and make it harder to become rich by only taxing income and not wealth.
The actual tax plan from Hillary shows how stupid this is. In fact, it’s an excellent tax plan designed to remove the unfairness from the current tax code. Most notably:
Clinton would also impose a minimum tax of 30 percent of AGI on filers with AGI greater than $1 million(i.e., the Buffett Rule). Taxes counted toward the new minimum tax requirement include: regular income taxes(after certain credits and including the Affordable Care Act surtax on net investment income), the alternative minimum tax (AMT), the 4 percent surcharge on AGI, and the employee portion of the payroll tax.4Taxpayers with AGI over $2 million would owe an additional tax on the difference between30 percent of AGI and the sum of those taxes. The tax payment phases in ratably between $1 and $2 million of AGI.
Because AGI includes capital gains and other investment income, it will ensure that the richest of the rich pay their fair share on investment income as well as so-called ordinary income.’
Clinton proposesto tax “carried interest” as ordinary income. Under current law, general partnersof an investment firm (e.g.,private equity) who receive a portion of their compensation as a share of the firm’s profits may report that portion as a long-term capital gain;thus they benefit from a lower income tax rate (23.8 percent)and avoid paying payroll taxes. Clintonwould tax carried interest income as ordinaryincome (top tax rate of 43.4 percent) and require the partner to pay self-employment taxes on the income.
Closes a major loophole there.
n tax year 2015, the basic exclusion for the estate tax is $5,450,000 (twice that for couples)and the top tax rate is 40 percent. Clinton proposes lowering the exclusion to $3.5 million for individuals and $7 million for married couples, with no adjustmentsf or inflation going forward, and raising the top rate to 45 percent. These changes would return the estate tax permanently to its 2009 parameters. Also, Clinton would establish an unindexed lifetime gift tax exemption of $1 million. The unindexed exemption levels will decline in real value over time meaning that more estates and gifts will become subject to tax. Clinton also proposes to require consistency between valuations for transfer (estate and gift) tax and income tax purposes, and to reform the rules that apply to grantor trusts.
Higher estate taxes, another tax aimed at wealth and not income.
The big political irony of our times is that the rich people most heavily affected by Hillary’s proposed tax increases will be heavily voting for her, which means they don’t consider higher taxes that big of a deal, at least not such a big deal that they would vote for a candidate that supports pro-life, guns, “denies” climate change, and is as low-class as Trump.
On the other hand, the middle-class and working-class white voters have been duped by Republican bigwigs, for so many decades they now take it as a core faith, that higher taxes on rich people somehow hurts them.
If only we could combine Hillary’s tax plan and Trump’s immigration plan and ability to say “radical Islamic terrorism” into a single candidate with the demeanor of Mitt Romney.
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Really, it’s a very good tax plan. I believe that the only rate increase is 5% increase in the estate tax and 4% increase on incomes GREATER than $5 million (a segment of the population likely 80 to 90% voting for Clinton over Trump).
All other revenue raised from the tax plan comes from closing what might be called loopholes, various ways that individuals and corporations avoid paying the existing top rate.
The impact of the tax plan will be almost entirely born by the top 1%, who are voting for Clinton anyway and deserve the tax plan they voted for, even if Trump wins.