To see how the presidential candidate tax plans would affect you, check out TPC’s tax calculator. It won’t replace full-blown tax software, but it will give you a ballpark idea of how you, or others, would do in the next administration.
How Donald Trump could benefit from his plan's business tax loophole: TPC’s Len Burman explains that “Trump’s proposal to slash tax rates on unincorporated businesses would create huge incentives for income tax avoidance and evasion, and his own behavior illustrates why… Trump’s proposal would create a much, much bigger incentive to make wages disappear…Trump might have saved $180,000 on every million dollars he relabeled under his plan.” Trump aides say his administration would write rules to prevent abuse, but have not explained how.
Single parents wouldn’t fare well under Trump’s tax plan. TPC’s Bob Williams explains how three of Trump’s changes would raise taxes for many single parents. First, they’d be required to file as individuals, boosting their tax rates at most incomes. Second, Trump would raise the standard deduction but eliminate personal and dependent exemptions. Third and most important, his three-rate tax structure would boost tax rates at some income levels. The result: Higher taxes for many heads of household.
And Trump also would raise taxes for higher income childless singles. TPC’s Len Burman notes that a “single, childless person with $129,000 or $420,000 in income—the top 1 or 0.1 percent , respectively, for singles—would pay a couple hundred bucks more under Trump’s plan than under Clinton’s or under current law.” That too is because of Trump’s new rate structure.
Charitable giving could fall under either candidate’s tax plan. TPC shows how both candidates (perhaps) unintentionally reduce incentives for charitable giving. Trump would reduce marginal tax rates, raise the standard deduction, and cap itemized deductions. These changes would reduce individual giving by 4.5 percent to 9 percent, or between $13.5 billion and $26.1 billion in 2017. Clinton would slightly increase incentives to give among low- and middle-income earners, but would reduce them for some high-income households. Overall, she’d reduce giving by between 2 percent and 4 percent, or $6 billion to $11.7 billion.
Thanks to the CRFB, you can also try to fix the national debt under the candidate’s plans. The Committee for a Responsible Federal Budget has an interactive tool that allows you to adjust either Trump’s or Clinton’s spending and tax plans to achieve your preferred debt target. In other words, you can “transform the candidates’ proposals into fiscally responsible ones.” It’s a tough job, but somebody’s gotta do it.
Which government agency remained leak-free and non-political throughout the campaign? TPC’s Howard Gleckman contrasts the IRS with the FBI. “The FBI, treated for decades as a paragon of bureaucratic virtue, is up to its neck in the swamp of electoral politics, thanks largely to its own doing. The IRS, subject of never-ending criticism from both political parties for bureaucratic fumbling, has been a model of responsibility and rectitude.”
Congress is still in recess, but the Daily Deduction resumes it regular schedule this week to report on national, state and local elections.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.