The presidential candidates and their tax policies
Tax policy is becoming one of the major issues of the 2016 presidential campaign. How will the upcoming election impact your personal tax situation?
Here is a summation of each candidate’s business, individual and estate tax proposals. This is not an endorsement of either candidate; rather, it’s an overview of their platforms as they pertain to taxes.
- Cut taxes for small businesses by expanding Section 179 expensing, increase the number of businesses that are eligible for cash basis accounting, quadruple the size of the startup deduction from $5,000 to $20,000, create a small business “standard deduction,” and expand the Affordable Care Act credit for small businesses.
- Enact business tax credits for profit-sharing and apprenticeships.
- Reform the Net Investment Income Tax (NIIT) and self-employment taxes, by broadening the NIIT tax base to include more business income.
- Create a 4 percent “surcharge” on high-income individual taxpayers with Adjusted Gross Income (AGI) above $5 million.
- Enact the “Buffett Rule,” establishing a 30 percent alternative minimum tax on taxpayers with AGI above $1 million. The alternative minimum tax (AMT) would phase in between $1 million and $2 million of AGI.
- Adjust the maximum capital gain rate to a rate greater than 20 percent.
- Lower the estate tax exemption amount to $3.5 million per person and enact a progressive rate on estates with a top rate of 65 percent on estates valued at over $1 billion.
- Reduce the corporate income tax rate from 35 percent to 15 percent.
- Eliminate the domestic production activities deduction (IRC Section 199) and all other business credits, except the research and development credit.
- Repeal the NIIT, the corporate alternative minimum tax, as well as the corporate alternative minimum tax.
- Consolidate the current seven individual tax brackets into three, with rates on ordinary income of 12 percent, 25 percent, and 33 percent.
- Adapt the current rates for qualified capital gains and dividends to the new brackets.
- Eliminate the head of household filing status.
- Repeal federal estate and gift tax but disallow step-up in basis rules for estates over $10 million.
Does this help you make your decision or only muddy the waters? Good luck in deciding and choose wisely!