What could the candidates' tax plans mean for you?

March 25, 2016

How could the presidential candidates' tax plans affect you? Tax Policy Center and Vox partnered to create a calculator that shows how much your federal tax liability could change under each plan.

Here's an example that illustrates what a single filer with one child and making $40,000 a year would pay, according to the plans and proposals laid out by Donald Trump, Ted Cruz, Hillary Clinton, and Bernie Sanders.

Tax Policy Center and Vox tax calculator

Find out what the candidates' tax plans could mean for you.

SHARE THIS POST

From TaxVox: Cruz’s flat tax + VAT would cut revenues by $8.6 trillion

February 16, 2016

GOP presidential hopeful Ted Cruz’s aggressive plan to shift the tax code from a mostly income-based system to one based on consumption would slash federal revenues by $8.6 trillion over the next decade, according to a new Tax Policy Center analysis. Including interest costs, it would add $10.2 trillion to the debt over 10 years unless Cruz offsets his tax cuts with unprecedented reductions in federal spending. By 2036, Cruz’s plan would add nearly $30 trillion to the debt.

TPC found that the Cruz plan, which would create a flat 10 percent individual income tax rate and replace both the corporate income tax and the Social Security and Medicare payroll tax with a 16 percent Value-Added Tax, would overwhelmingly benefit high- income households.

TPC estimates that in 2017, Cruz would cut taxes by an average of about $6,000, or 8.5 percent of after-tax income.  However, he’d slash taxes by an average of $1.9 million for those in the top 0.1 percent (who will make $3.8 million or more), raising their after-tax incomes by 29 percent.

By contrast, Cruz would cut taxes by an average of $46--or 0.4 percent of after-tax income-- for the lowest-income households (who make $23,000 or less).  Middle-income households would receive an average tax cut of about $1,800, or 3.2 percent of their after-tax income.

Cruz tax plan

In 2025, the lowest-income households would face an average tax increase of $116, thus reducing their incomes by 0.6 percent, while those in the top 0.1 percent would receive a $2.2 million tax cut, boosting their incomes by 23 percent.

Read the rest on TaxVox.

SHARE THIS POST