INCOME TAX, ACCOUNTING, CONSULTING AND BUSINESS ADVISORY SERVICES
William Behrens, CPA, ABV, CFF
INCOME TAX PLANS OF
CLINTON AND TRUMP
Trump is proposing the largest middle class tax cut in history. Trump is taking the 7 individual tax brackets and compressing them into 3 tax brackets while at the same time reducing the tax rate on each bracket down to 12%, 25% and 33%. This is half way between current tax rates and Trumps first individual tax rate structure proposed a year ago. This also corresponds with Paul Ryan’s plan in June. This reduces the top bracket down from 39.6% to 33%. Trumps is cutting corporate income taxes and pass through entity income taxes to 15% from 35% to compete in the global economy, encourage business that left the USA to return, and encourage new business to settle in the USA. Trump is eliminating Estate Tax. The tax plan is expected to significantly stimulate the economy and create new jobs. The new Trump tax plan is estimated to cost $2.55 trillion over 10 years. Trumps old plan was estimated to cost $10 Trillion over 10 years.
Individual tax reform.
The individual tax rates under Trump's tax plan would be reduced and provide a hugh middle class tax cut:
The long-term capital gains and dividends rates would be:
Trump originally called to quadruple the standard deduction. This would take singles from $6,300 to $25,000. Trump calls for reducing or eliminating most deductions and loopholes available to the very rich. His plan also calls for quicker phase out of itemized deductions and personal exemptions with higher income levels. Taxpayers in the 12 percent brackets would keep "all or most" of their current deductions, those in the 25 percent bracket would keep "more than half" of their current deductions, and those in the 33 percent bracket would keep "fewer" deductions. Two of the most popular deductions, charitable giving and mortgage interest deductions, would remain unchanged for everyone. Trump would also allow individuals to fully deduct health insurance premium payments.
Business tax reform. Trump's tax plan would cut the corporate tax rate to 15 percent and tax all pass-through income from S- corporations and partnerships at 15%.
Other business tax reforms include:
Estate tax reform. Trump's tax plan would eliminate the estate tax.
Miscellaneous tax reforms. Other reforms proposed by Trump include:
Hillary’s tax plan largely maintains the status quo of our tax system. The estimated tax increase of Hillary’s tax plan is $1.2 trillion over 10 years. Individual rates remain the same except for an increase in capital gains tax. Capital gains start at 39.6% and lower to 20% if held longer than 5 years. Business rates remain the same at a rate of 35% . Estate tax exemptions are lowered to $3.5 million. Gift tax exemptions are lowered to $1 million. The excess over the exemption will taxed at 45% up from the current 40%.
Individual tax reform. Clinton would reform individual taxes by:
• Imposing the "Buffett rule" requiring taxpayers earning more than $1 million per year to pay at least 30 percent in taxes and "broadening the base of income subject to the rule."
• Enacting the "Fair Share Surcharge" requiring taxpayers earning more than $5 million per year to pay an extra 4 percent surtax.
• Cutting taxes for "hard-working families."
• Establishing a 20 %"caregiver credit" up to a $1,200 credit.
• Capital gains would begin at 39.6 for property held for less than one year and decrease to 20 percent if property is held over a six years. This is to promote long-term investment.
• Limiting the tax value of certain tax breaks to 28 percent. This is a tax increase
Business tax reform. Clinton's business tax proposals include:
Estate tax reform. Clinton would modify the estate and gift tax system by:
Miscellaneous tax reforms. Other tax reform proposals of Clinton include:
Hillberg Newsletter December 2015
Hillberg Newsletter September 2015
Hillberg Newsletter August 2015
Hillberg Newsletter July 2015
Hillberg Newsletter January 2015
Hillberg Newsletter August 2014
Hillberg Newsletter July 2014
Hillberg Newsletter June 2014
Hillberg Newsletter May 2014
November 2013: Year-end Tax Planning
October 2013: Avoiding a Tax Surprise
September 2013: Patient Protection and Affordable Care Act
August 2013: Business Valuations
2012 Year End Planning
September 2012: Retirement savings For Individuals and the Self-Employed.
August 2012: Virtual CFO Services and Cloud Computing
January 2012: TAX CHANGES FOR 2012
December 2011: Feeling charitable? Great! Now let's review the tax rules
November 2011: Take steps to cut your 2011 taxes
October 2011: Tax Benefits of Hiring Your Child
September 2011: Budget Control Act Of 2011
August 2011: 2011 Second Quarter Federal Tax Developments
March 2011: Tax Planning: Retirement Savings for the Self-Employed
February 2011: Tax Stuff You Should Know or Might Be Interested In
January 2011: The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010
December 2010: Important IRS Enforcement
November 2010: What, Why & How To Keep Records
October 2010: Employee Business Expenses
September 2010: General Tax Considerations
August 2010: Is Compensation Reasonable?
July 2010: Health Care Reform
June 2010: HIRE Act, Incentives to Hire and Retain the Unemployed
May 2010: Income Tax Changes For 2010 And 2011
April 2010: Reasons To Perform A Business Valuation
March 2010: Moving And Job Hunting Expenses
February 2010: Quickbooks Tips - Bank Reconciliation
January 2010: Reasons To Perform A Business Valuation
December 2009: Reasons To Perform A Business Valuation
November 2009: Bank Reconciliation Process
October 2009: A Good Reason To Perform A Business Valuation
September 2009: You May Be Eligible For 2009 And 2010 Tax Credits
August 2009: Two Basics Of Accrual Accounting: Prepaid Expenses & Unearned Revenue
July 2009: Importance Of Internal Controls In Small Business
June 2009: How To Read a Business Valuation Report
May 2009: In Child Support Determinations, Should S Corp Retained Earnings Be Counted As Part Of The Minority Owner's Income?
March 2009: The American Recovery And Reinvestment Act (Arra)
February 2009: Responding to Identity Theft
January 2009: The Worker, Retiree and Employer Recovery Act
December 2008: Discount For Lack Of Marketability - Controlling Interests
November 2008: White Collar Crime - Who Commits It?
October 2008: Victim Organizations
September 2008: Fraud Prevention