Trump’s tax plan cuts wider than Clin­ton’s

Demo­crat aims to in­crease rev­enue

The Washington Times Weekly - - Politics - BY STEPHEN DI­NAN

Hil­lary Clin­ton wants to sock the very wealthy with an $800,000-a-year tax in­crease. Don­ald Trump says they should get a $1.1 mil­lion tax cut.

The poor, mean­while, make out about the same no mat­ter who is in the White House: a $100 tax cut un­der Mrs. Clin­ton and a $110 cut un­der Mr. Trump, ac­cord­ing to an anal­y­sis by the non­par­ti­san Tax Pol­icy Cen­ter, which crunched the num­bers and said Mr. Trump is more gen­er­ous to tax­pay­ers but does far more dam­age to fed­eral rev­enue.

In­deed, Mr. Trump would open a $6 tril­lion gap in the fed­eral bud­get over the next decade, and Mrs. Clin­ton would raise $1.4 tril­lion more in rev­enue. Al­most all of that would come from those who make more than $3.7 mil­lion a year, the top 10th of a per­cent of Amer­i­can work­ers.

Mrs. Clin­ton tried to sweeten her plan for the poor and mid­dle class, say­ing she would ex­pand the child tax credit for fam­i­lies with chil­dren younger than 5, dou­bling the max­i­mum credit from $1,000 to $2,000 per child.

Mrs. Clin­ton said that is just “a down pay­ment” and more re­lief is on the way.

“Hard­work­ing, mid­dle-class fam­i­lies are strug­gling with ris­ing costs for child care, health care, care­giv­ing and col­lege,” Mrs. Clin­ton said. “This new tax credit will make their lives a lit­tle bit eas­ier and help re­store fair­ness to our econ­omy.”

Adding the child credit helped im­prove Mrs. Clin­ton’s num­bers, which show only a mod­est tax cut for most Amer­i­cans.

In­deed, most tax­pay­ers would get less than a cou­ple of hun­dred bucks ex­tra from the IRS un­der her plans. Those mak­ing $48,000 to $83,000 — the mid­dle class — would av­er­age $110 ex­tra, and those mak­ing $83,000 to $143,000 would av­er­age an ex­tra $40 in 2017.

Mr. Trump is far more gen­er­ous, with those in the mid­dle get­ting an ad­di­tional $1,010 in tax re­lief and those mak­ing $83,000 to $143,000 re­ceiv­ing an ex­tra $2,030.

The big­gest changes come for the wealth­i­est. Un­der Mr. Trump’s plan, the top 20 per­cent — those mak­ing more than $143,000 — would pay an av­er­age of $16,660 less. Un­der Mrs. Clin­ton, they would pay $6,690 more.

Those dif­fer­ences end up play­ing out in the fed­eral bud­get, where Mr. Trump — ab­sent giant spend­ing cuts — would dra­mat­i­cally deepen deficits.

The Trump campaign has said his tax cuts would be deficit-neu­tral, which would mean those spend­ing cuts would have to come from some­where. The lib­eral-lean­ing Cen­ter on Bud­get and Pol­icy Pri­or­i­ties said the cuts would likely come from pro­grams that help the poor be­cause the wealthy don’t use those pro­grams to the same ex­tent.

Ja­cob Leiben­luft, an eco­nomic ad­viser to Mrs. Clin­ton’s campaign, said the Trump plan amounted to “mas­sive give­aways to the rich­est Amer­i­cans.”

Stephen Miller, a se­nior ad­viser to Mr. Trump, dis­missed the Tax Pol­icy Cen­ter plan as fraud­u­lent and said re­leas­ing it “wasted ev­ery­one’s time.” He said the Tax Pol­icy Cen­ter — a joint op­er­a­tion be­tween the Ur­ban In­sti­tute and the Brook­ings In­sti­tu­tion — is bi­ased to­ward Mrs. Clin­ton and that the study didn’t cal­cu­late the eco­nomic ben­e­fits of cut­ting taxes for the wealthy.

Mr. Trump has said that lower taxes will mean more jobs and a big­ger econ­omy, re­duc­ing the $6.2 tril­lion in rev­enue lost be­cause of the rate cuts.

“The Trump plan is rev­enue-neu­tral, mas­sively cuts mid­dle-class taxes and has huge child care ben­e­fits for low- and mid­dle-in­come fam­i­lies,” Mr. Miller said.

He also said the Tax Pol­icy Cen­ter ig­nored some of the de­tails of the Trump plan.

The cen­ter said Mr. Trump’s aides did not co­op­er­ate, so they had to make a num­ber of as­sump­tions they shared with the campaign. It said Mrs. Clin­ton’s campaign did co­op­er­ate and shared de­tails of her pro­posed child tax credit even be­fore it was an­nounced.

Over­all, Mr. Trump’s plan would cut the num­ber of tax brack­ets and slash rates across the board. The mar­ginal rate on the high­est in­come bracket would drop to 33 per­cent. His plan cuts the cor­po­rate in­come tax rate to 15 per­cent, caps the level of de­duc­tions tax­pay­ers can claim and elim­i­nates the head-of-house­hold fil­ing sta­tus, but adds breaks for child care and in­creases the earned in­come tax credit.

Mrs. Clin­ton’s plan would im­pose a num­ber of hikes on high-in­come house­holds, in­clud­ing a 30 per­cent min­i­mum tax that phases in be­gin­ning at $1 mil­lion. Among her many other tweaks are elim­i­nat­ing an Oba­macare tax that would hit union mem­bers par­tic­u­larly hard and rules that would make it tougher to de­fer cap­i­tal gains taxes.

Scott Green­berg, an an­a­lyst at the Tax Foun­da­tion, which is re­leas­ing its own anal­y­sis this week of the Trump and Clin­ton plans, said they gen­er­ally match up with the Tax Pol­icy Cen­ter’s anal­y­sis: The Trump plan would gen­er­ally re­duce taxes, with most of the gains go­ing to well-off tax­pay­ers, while Mrs. Clin­ton’s plan is a net tax in­crease, though many fam­i­lies would pay less.

Mr. Green­berg said Mr. Trump does de­serve credit for try­ing to take some of the com­plex­ity out of the tax code.

“Only one of the can­di­dates in the race has even given lip ser­vice to the con­cept of tax sim­plic­ity, and that’s Trump,” he said. “Clin­tons’ tax plan would un­abashedly make the tax code more com­pli­cated.”

One of the con­se­quences of cut­ting de­duc­tions and elim­i­nat­ing the head-of­house­hold fil­ing sta­tus, though, is that it could “cause many large fam­i­lies and sin­gle par­ents to face tax in­creases.”

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