Says Hillary Clinton's "plan is going to raise taxes and even double your taxes."
One of the planned topics for the third presidential debate in Las Vegas was the economy, so tax policy came up in the face-off between Donald Trump and Hillary Clinton. At one point, Trump said of Clinton’s tax proposal, "Her plan is going to raise taxes and even double your taxes." Is that correct? Independent experts who have modeled the candidates’ tax proposals said that would be the exception rather than the rule. First, a quick summary of Clinton’s tax plan, which includes tax increases for the wealthy. Clinton proposes a 4 percent surcharge on income earned in excess of $5 million as well as a minimum tax rate of 30 percent for those earning more than $1 million. She would also limit certain exemptions and deductions to 28 percent; she would tax carried interest, a type of income typically earned by hedge fund managers, as ordinary income; and she would permanently reduce the tax threshold for estates to $3.5 million, or $7 million for married couples, while increasing the top estate tax rate to 45 percent. The general impact of these changes will be to raise taxes on the richest Americans. An analysis by the Urban Institute-Brookings Institution Tax Policy Center concluded that "in 2017, taxpayers in the top 1 percent of the income distribution -- those with incomes above $730,000 in 2015 dollars -- would see their tax burdens increase more than $78,000." However, taxpayers in the bottom 95 percent of the income spectrum -- those earning less than $300,000 -- "would see little change in average after-tax income," the Tax Policy Center found. The Tax Foundation, which generally favors lower taxes, broadly concurred in its own analysis. Without accounting for the plan’s impact on the broader economy, "Clinton’s tax plan would raise taxes on the top 20 percent of taxpayers and cut taxes for taxpayers in all other income quintiles," the foundation’s analysis said. Trump spokesman Steven Cheung told PolitiFact that "Clinton will double tax rates on short-term capital gains." The campaign pointed to an article from Fox Business that explained Clinton’s proposal to levy higher taxes on investments held for a short period of time than on investments held for longer periods. "Under Clinton’s proposal, investments held between one and two years would be taxed at the normal income-tax rate of 39.6 percent, nearly double the existing 20 percent capital gains rate," the article said. However, Trump said "your taxes," suggesting that lots of Americans would be hit by Clinton’s tax increases. That’s a stretch, since, as noted in the Fox Business article the Trump camp pointed to, "only the top 0.5 percent of taxpayers would be impacted by the plan." We asked representatives of both groups whether they thought Trump’s comment was broadly accurate. "It may be possible to find a very specific case where this is true, but her plan would only raise taxes modestly and would actually cut taxes for many people," said Kyle Pomerleau, director of federal projects at the Tax Foundation. Roberton Williams, a fellow at the Tax Policy Center, said that if you parse his group’s analysis, it shows that, on average, the top 0.1 percent of taxpayers would see their effective tax rate go up from 34.4 percent to 41.5 percent -- almost a 21 percent increase. That’s a significant bump, but it’s far from double. Meanwhile, the bottom 80 percent would see tax cuts, he said, while those in the 80th to 95th percentiles would get small tax increases, on the order of about 0.1 percent, Williams said. "I suppose some cases could be imagined where taxes would rise a lot," Williams said. "Perhaps a person who has carried interest could see their tax rate go from the 23.8 percent top capital gains rate to a 47.4 percent marginal tax rate on income in excess of $5 million. With enough of that type of income, that person's taxes would go up a lot." Also, Clinton’s proposed minimum tax rate of 30 percent for those earning more than $1 million -- commonly known as the Buffett Rule -- could conceivably double taxation for people who are lucky enough to be paying a rate under 15 percent today, he said. (The Buffett Rule is named after Warren Buffett, who has criticized the fact that he is often taxed at a lower rate than his secretary.) But both of those scenarios are "very rare" cases, Williams said. Our ruling Trump said that Clinton’s tax proposal "is going to raise taxes and even double your taxes." Independent analyses found that the vast majority of taxpayers would see tax cuts or no change to their tax bill under the Clinton plan. The richest taxpayers would see increases -- and the very richest could see significant increases -- but even the typical rich taxpayer would not see their taxes double. Analysts said it’s possible that specific wealthy taxpayers with a certain confluence of income streams might see their taxes double, but that would be the exception that proves the rule. We rate Trump’s statement Mostly False. https://www.sharethefacts.co/share/67b81a1f-6064-4072-a9af-b6ee7c595bbd
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