By Mike Bohigian, CPA
With the primaries behind us and the party conventions in full swing, now’s a good time to look at one issue that’s barely been addressed this election campaign: taxes. Overshadowed by hot-button issues like immigration and national security, tax plans for both major party candidates in fact do exist and are posted on their respective campaign websites.
Starting with Hilary Clinton, her tax plan would enact the “Buffet rule”, requiring individuals who make more than $1 million in a year to pay at least 30% in taxes. It also would create an additional tax bracket of 43.6 percent on earnings over $5 million, representing a 4 percent increase over the current highest bracket of 39.6 percent that went into effect in 2013.
Her business tax plan includes a proposal to spur hiring by offering a $1,500 “apprenticeship credit” for every new worker an employer hires; foster profit-sharing with employees by providing a 15% tax credit to employers who share profits; impose a risk fee on large banks with more than $50 million in assets, and collect U.S. taxes on unrepatriated earnings.
Clinton’s counterpart, Donald Trump, supports a plan to simplify the seven different individual tax brackets into just three: 10 percent, 20 percent, and a 25 percent. Trump also proposes reducing long-term capital gains and dividends rates, eliminating the Alternative Minimum Tax. On the business side, he advocates cutting corporate taxes to 15%, and offering a one-time repatriation of cash overseas at a 10% rate.
For any voters looking for a third party choice, Gary Johnson, the Libertarian candidate, advocates a tax plan that is both radical and simple: the abolishment of the IRS, and ultimately the replacement of income and payroll taxes with a single national consumption tax speculated to be in the 25-30% range.
Stay tuned for any tax plan developments as this wild and unpredictable election season inches closer to November 8.