What Do the Proposed Tax Changes Mean to You?

What Do the Proposed Tax Changes Mean to You?

With a presidential election looming a mere six months away, tax policy is soon to rise to the forefront of the public consciousness. Such a focus is justified; after all, the tax proposals of three of the four remaining candidates — Hillary Clinton, Bernie Sanders and Donald Trump (note: John Kasich has not released a proposal) – run the gamut from $15 trillion dollar tax increases (Sanders) to $11 trillion tax cuts (Trump).
As the campaign trail continues to heat up, each candidate will pitch their plan as offering the perfect combination of fairness, revenue generation, and overall economic growth. Economists will tear the plans apart; measuring the impact on the budget, debt, GDP and job creation. But what do the proposed tax changes set forth by Clinton, Sanders and Trump actually mean to you?

Recently on the Brian Lehrer Show, on National Public Radio, Withum tax expert discusses the details of each candidate’s plan and explain how these plans will impact taxpayers at various income levels. As a summary of conversation with NPR, below is a table reflecting the tax bill of four hypothetical taxpayers under each candidate’s tax proposal. The analysis is based on a model established by the Tax Foundation, and uses certain assumptions to fill in some of the gaps that remain in each candidate’s plans.

Taxpayer 1:
Single
0 Dependents
Income $55,000
Taxpayer 2:
Married filing joint
0 Dependents
Income $100,000
Taxpayer 3:
Married filing joint
2 Dependents
Income $250,000
Taxpayer 4:
Married filing joint
3 Dependents
Income $6,000,000
Current $15,349 $26,668 $71,131 $2,557,121
Clinton $15,349 $26,668 $71,131 $2,597,617
Sanders $18,728 $33,009 $87,136 $3,749,484
Trump $11,105 $19,490 $53,704 $1,710,444

The dramatic differences in the final column reflect the candidates’ opposition on the top marginal tax rate: Trump would impose a top rate of 25%, under Clinton the rate would rise to 44.6%, while under Sanders the top rate would move from its current high of 39.6% to 54.2%.

View Candidate Tax Calculator

We encourage you to access the calculator and gain a better understanding of how the candidates’ proposed tax changes would impact you should they become law. If you have any additional questions about the proposals, please fill in the form below.
Author:Nicole DeRosa, CPA | [email protected]

To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

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