"How the candidates' tax proposals highlight different economic priorities" PBS NewsHour 8/11/2016
The ultimate Flim-Flam Man ("Master of Back-Stabbing, Cork-Screwing, and Dirty-Dealing") vs Hillery.
SUMMARY: Hillary Clinton and Donald Trump both spoke about their intended tax policies this week. On Monday, Trump proposed tax cuts for all, while on Thursday, Clinton pledged to increase taxes on the wealthy and use that money for the middle and lower classes. Judy Woodruff speaks with Neil Irwin of the The New York Times and David Wessel of the Brookings Institution for analysis of both plans.
JUDY WOODRUFF (NewsHour): Few things are certain in life, and this year's presidential campaign has certainly defied tradition. But when it comes to taxes, it's become clear there are pretty big differences between the two major party candidates.
Lisa Desjardins reports. It's part of our ongoing look at issues shaping this election.
LISA DESJARDINS (NewsHour): Taxes, among the most powerful of government policies, affecting how we live and work every day. This week starts the first head-to-head policy speeches between Hillary Clinton and Donald Trump, starting with Trump Monday.
DONALD TRUMP (R), Presidential Nominee: I am proposing an across-the-board income tax reduction, especially for middle-income Americans.
LISA DESJARDINS: Trump's plan? He would simplify the tax system to just three smaller rates and fewer deductions. His top Rate would be 33 percent vs. the current 39.6 percent. We don't yet know who would see which rates.
He's more specific on the estate tax. That's the tax on inheritances over $5.4 million. Trump would eliminate that tax altogether, a big benefit for (big) farmers and wealthy families. Republicans say it is fair and positive.
Hillary Clinton, in her economic speech in Michigan today, could not have disagreed more.
HILLARY CLINTON (D), Presidential Nominee: Multimillionaires shouldn't be able to pay a lower tax rate than their secretaries.
LISA DESJARDINS: Clinton would charge a minimum 30 percent tax on incomes over a million dollars, and she'd raise the total tax rate to 43.6 percent for those making over $5 million. Clinton wouldn't change rates for the lower or middle classes.
Clinton charges that Trump's tax plan is a giveaway to the wealthy, especially one big change.
HILLARY CLINTON: In his speech on Monday, he called for a new tax loophole — let's call it the Trump loophole — because it would allow him to pay less than half the current tax rate on income from many of his companies.
LISA DESJARDINS: Clinton is talking about something complicated, but important, called pass-through income. Here's how it works.
Classically, a business pays a 35 percent rate on taxable incomes. But some businesses, where the owner or family is the business — think about attorneys with their own firms, for example — can pay using what's called a pass-through. In that case, the business doesn't pay a corporate tax. Instead, the company pays the owner and the owner pays an individual income tax of up to 39.6 percent.
This exists so the owner isn't taxed twice, as a business and individual. Donald Trump's plan would cut all corporate taxes to 15 percent. And he would set a new 15 percent rate for these pass-through incomes, a huge cut that could apply to his own businesses. He responds that Clinton and Democrats overtax companies.
JUDY WOODRUFF: Neil, what about changes in the estate tax? This is the tax people are charged when they die. They pass on everything they have to their children and there’s a tax associated with that. How do Clinton and Trump deal with that?
NEIL IRWIN: Well, with Trump, it’s simple. He wants to get rid of it entirely.
And one thing to remember, right now, the cutoff there for a married couple, it’s $10.9 million, meaning you have to be a multimillionaire when a person dies to face that tax at all. He still wants to get rid of it.
Hillary Clinton wants to go the other direction, reduce those exemptions down to $7 million for a married couple. So it would affect more people than it does now if Hillary Clinton got her way.
JUDY WOODRUFF: And, again, what would the effect be on revenue, David?
DAVID WESSEL: Well, we don’t get a lot of revenue from the estate tax.
We know the direction. But I think what Neil says is really important. So, of every 1,000 people who die in a given year, only two of them face the estate tax. So, it affects only the very rich. It’s almost more of a talking point than it is a real tax policy.