Knowing the presidential candidates’ stances on policies and issues is key to being an informed voter. Just as in years past, tax policy is again a big issue.
Current tax brackets as of 2016 per the IRS:
- 10% tax rate – Up to $9,275 for single filers, up to $18,550 for married filers
- 15% tax rate – $9,276 to $37,650 for single filers, $18,551 to $75,300 for married filers
- 25% tax rate – $37,651 to $91,150 for single filers, $75,301 to $151,900 for married filers
- 28% tax rate – $91,151 to $190,150 for single filers, $151,901 to $231,450 for married filers
- 33% tax rate – $190,151 to $413,350 for single filers, $231,451 to $413,350 for married filers
- 35% tax rate – $413,351 to $415,050 for single filers, $413,351 to $466,950 for married filers
- 39.6% tax rate – $415,051 or more for single filers, $466,951 or more for married filers
Let’s take a look at the proposed new rates from the two front-runners: Hillary Clinton and Donald Trump.
- Hillary Clinton (D) wants to leave income tax rates as is except for the wealthiest Americans.
o 39.6% tax rate – $415,051 to $5 million for single filers, $466,951 to $5 million for married filers
o 43.9% tax rate – $5 million or more for single and married filers
o Clinton’s plan places a 4% surtax on income earned in excess of $5 million. - Donald Trump (R) wants to simplify the US tax code and create four brackets: 0%, 10%, 20%, and 25%
o 0% tax rate – Up to $25,000 for single filers, up to $50,000 for married filers
o 10% tax rate – $25,001 to $50,000 for single filers, $50,001 to $100,000 for married filers
o 20% tax rate – $50,001 to $150,000 for single filers, $100,000 to $300,000 for married filers
o 25% tax rate – $150,000 and up for single filers, $300,001 and up for married filers
In terms of deductions, Clinton wants to cap the value of all itemized deductions at 28%. This means the wealthiest Americans will not get the benefit of some deductions that currently can equate to a reduction in taxes of 39.6 cents for every dollar of income. Trump also has his eye on limiting deductions for those taxpayers in a higher tax bracket. While those within the 10% bracket will keep all or most of their current deductions, those within the 20% bracket will potentially lose almost half of their current deductions and those within the 25% bracket could lose more than half of their deductions.
Who will win the 2016 U.S. presidential election? We will soon find out!
