Tax proposals from Democratic presidential candidate Hillary ClintonHillary Rodham ClintonEllison holds edge in DNC race Democrats face fierce urgency of 2018 FEC commissioner: 'I will not be silenced' MORE would raise federal revenue by $1.1 trillion over the next decade, with most of the tax increases falling on the wealthy, an analysis from the non-partisan Urban-Brookings Tax Policy Center (TPC) found.
“It’s not a major reform,” he said.
Almost two-thirds of the revenue increase would be attributable to three of Clinton’s proposals aimed at the wealthy: a 4-percent surtax on adjusted gross income over $5 million, a 30-percent minimum tax on those with adjusted gross income over $1 million and a 28-percent cap on the value of certain tax preferences, TPC said.
Other tax proposals from Clinton include adjusting the taxation of capital gains to encourage people to hold assets for longer, initiatives aimed at deterring companies from reincorporating overseas to lower their tax burdens and changes to the estate tax.
More than half of the tax increases Clinton has proposed would affect the top 0.1 percent of taxpayers, and 94 percent of the tax increases would fall on taxpayers in the top fifth of income, according to TPC’s report.
The average tax increase in 2017 for taxpayers in the top 0.1 percent would be almost $520,000, while those who make less than $300,000 would not see much of a change to their after-tax income. Taxpayers in the bottom three-fifths of income would have small tax increases that would result largely from business tax provisions leading to slightly lower wages and returns to saving, TPC said.
Without taking into account new spending initiatives or macroeconomic effects, Clinton’s tax proposals would lower the federal debt by more than $1.2 trillion over 10 years and by $4.3 trillion over two decades, according to the report.
But Clinton’s proposals would increase the complexity of the tax code, particularly for high earners. The goals of the 30-percent minimum tax and 28-percent cap “could be attained much more simply by explicitly increasing marginal tax rates for high-income filers and converting selected deductions and exclusions into tax credits,” TPC said.
Additionally, Clinton’s proposals “would raise marginal tax rates on labor and capital, thus reducing incentives to work, save, and invest among high-income households,” the group said.
Clinton’s campaign told TPC that the candidate intends to release more proposals in the future aimed at cutting taxes for low- and middle-income families. These proposals were not included in TPC’s analysis.
TPC’s analysis of the tax plan of Clinton’s rival for the Democratic nomination, Bernie SandersBernie SandersA guide to the committees: Senate Ellison holds edge in DNC race Rep. John Lewis: Ellison is 'right person' to lead DNC MORE, will be released Friday.