How would Clinton’s tax proposals affect different taxpayers?
f you'd like to take a break from the made-for-TV thrills of the Democratic convention, TPC has prepared a series of bite-sized explanations of Hillary Clinton's tax proposals. We'll be running them daily while the Democratic Party is gathering in Philadelphia. Last week, while the Republicans were in Cleveland, we published four posts on Donald Trump's tax plan.
Democratic presidential nominee Hillary Clinton’s tax proposals would raise $1 trillion over the coming decade—and nearly all of it would come from high-income households.
The Tax Policy Center (TPC) estimates that the highest-income 20 percent of households would pay an average $4,500 more in taxes (1.7 percent reduction in after-tax income). Even among this group, tax increases would be concentrated among the highest earners. Households between the 80th and 99th percentiles (with income between about $143,000 and about $732,000) would pay between $250 and $2,700 in new taxes (no more than 1.0 percent of after-tax income) while filers with income above $732,000 (the highest 1 percent) would pay about $78,000 more on average (5.0 percent of after-tax income). The top 0.1 percent—filers with income greater than $3.8 million—would pay an additional $520,000 (7.6 percent of after-tax income).
Low- and moderate income households would pay roughly the same tax as they do today. Their average after-tax incomes would drop slightly (by no more than 0.2 percent of after-tax income) because TPC projects that Clinton’s business tax hikes would slightly lower wages.
The Clinton campaign says she may propose a new tax cut for low- and middle-income households later in the campaign. Such a cut would probably turn after-tax losses into gains for the lowest income 80 percent of households. Stay tuned to see.
This article originally appeared on TaxVox.
