Republican 2016 hopefuls have been unveiling tax plans promising deep cuts and drastic changes to current policies. Ahead of Tuesday night’s fourth GOP presidential debate, here’s a look at the top contenders’ economic proposals.
The outspoken real-estate mogul’s tax plan calls for four tax brackets: 0 percent, 10 percent, 20 percent and 25 percent. Individuals making under $25,000 and families making under $50,000 would pay no income tax.
The billionaire would lower the corporate tax rate, claiming no business would pay over 15 percent. He would also do away with the estate tax and the carried interest tax break for hedge-fund managers. A one-time 10 percent tax would be placed on American corporations’ earnings that were made abroad.
“It will be simple, it will be easy, it will be fair, it’s graduated,” he said.
According to the Tax Foundation, a Washington-based think tank, Trump’s plan would increase the deficit by $10 trillion over the course of 10 years.
Retired pediatric neurosurgeon Ben Carson told Fox Business Monday he thinks a 15 percent flat tax — up from his original, tentative 10 percent proposal — coupled with the elimination of all deductions and loopholes is the best way to balance the budget. The 15 percent rate would be extended to taxes on foreign income and the capital gains, which currently is taxes at a 20 percent rate.
Economists project the plan could lead to the addition of $1.1 billion to the deficit annually.
“Everybody should be hit exactly the same,” Carson told the network.
Sen. Marco Rubio’s plan eliminates five of the seven tax brackets, setting them at 15 percent and 35 percent while eliminating almost all personal tax deductions.
The top corporate and non-corporate tax rate would stand and 25 percent. Businesses would also be allowed to deduct investment costs. The Florida politician would get rid of the estate tax and introduce a new $2,500 child tax credit. Taxes on capital gains and dividends for corporate shareholders would also be eliminated.
The Tax Foundation estimates $6.05 trillion in 10-year static revenue, which assumes the cuts won’t impact economic behavior, could be lost under the proposal.
“The current tax code taxes too much, taxes unfairly, and conspires with our outmoded welfare system to trap poor families in poverty, rather than facilitate their climb into the middle class,” Rubio and Utah Sen. [crscore]Mike Lee[/crscore] wrote in The Wall Street Journal in September.
The former Florida governor’s plan consolidates the current system down to three tax brackets standing at 10 percent, 25 percent and 28 percent. The corporate rate and capital gains rate would also be lowered to 20 percent. Under the proposal, the earned income tax credit would be nearly doubled for childless filers.
Like Trump, Bush would also close the carried interest loophole, which allows private equity and hedge fund managers to tax dividends at the lower capital gains rate. Standard deductions would be increased to $11,300 for individuals and $22,600 for families. Deductions would be capped at 2 percent of filers’ adjusted gross income with the exception of charitable deductions.
Bush claims his plan will grow the economy by 4 percent.
The proposal could come at the cost of $3.66 trillion, the Tax Foundation estimates.
“We need to move to a completely different direction.” he said during an appearance on “Squawk Box” in September.
Sen. Ted Cruz calls for a 10 percent flat tax and the abolition of the IRS in his economic proposal. The Texas politician would increase the standard deduction to $10,000 and the first $36,000 of a families’ income would not be taxed at all.
With the exceptions of the child tax credit and the earned income tax credit, all credits would be eliminated. The 2016 hopeful would also do away with most deductions, excluding charitable donations and the home mortgage interest deduction.
The payroll tax and the corporate income tax would be replaced with a flat 16 percent business tax. The estate tax would also be terminated. He would establish a Universal Savings Account for Americans to defer taxes on up to $25,000 annually.
The Tax Foundation estimates the proposal could cost up to $3.66 trillion.
“It would mean incredibly economic growth, and in terms of the results, my No. 1 priority both in the Senate and as president is economic growth – because every other challenge we’ve got depends on growth,” Cruz told Fox Business Friday.
The former Hewlett-Packard CEO has chosen not to unveil a written proposal. During an appearance on “Meet the Press” Sunday, she told host Chuck Todd she is happy to answer any questions about her policies verbally.
“Anybody can put a plan on a website,” Fiorina said. “It’s another thing to say, ‘You know what I think we need do,’ and say it over and over in public and be held accountable for this.”
While she may not have a concrete detailed proposal, the businesswoman said she plans on lowering rates, simplifying the tax code and closing corporate loopholes.
Ohio Gov. John Kasich said his plan will balance the budget within 10 years. The former chairman of the House Ways and Means Committee proposed bringing the top income rate down from 39.6 percent to 28 percent.
The corporate tax would be reduced to 25 percent, a 10 percent cut, the long-term capital gains rate would be slashed to 15 percent and the estate tax would be eliminated. The proposal also calls for the earned income tax credit to be increased by 10 percent.
“I will immediately put us on a path to a balanced budget and I will get it done within eight years,” the candidate said while campaigning in New Hampshire in October.
Kentucky Sen. Rand Paul’s proposal would implement a 14.5 percent flat tax. The plan would lift the standard deduction to $15,000 per individual and increase the personal exemption to $5,000 for taxpayers.
While the child tax credit and the earned income tax credit would be kept in place, all other credits would be eliminated. Like several other candidate’s plans, Paul’s would also do away with individual deductions with the exception of charitable deductions and the home mortgage interest deduction.
The plan eliminates the alternative minimum tax, the net investment income tax, the estate tax and the Medicare surtax. A 14.5 business transfer tax would be implemented in lieu of corporate income taxes.
The Tax Foundation’s 10-year static revenue estimates $1.79 billion would be lost, while the 10-year dynamic estimates show a net gain of $737 billion.
“My tax plan would blow up the tax code and start over,” Paul says on his website.
The Fox Business Network and Wall Street Journal Debate will take place in Milwaulkee, Wis., Nov. 10 at 9 p.m. ET, with the low-tier debate taking place at 7.
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