Tax policy is often a popular platform for politicians because it’s a topic that resonates with voters. How our tax dollars are spent – not to mention what our tax dollars are used for – can be an important method for connecting with potential voters during an election.
Of course, implementing those policies once in office can be challenging, particularly when the ideas are big and bold.
Let’s take a look at what the top remaining 2020 Democratic candidates and President Donald Trump are proposing when it comes to your taxes and those of all Americans.
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President Donald Trump
The president hasn’t released a tax plan as part of his campaign for reelection, but he has said he wants “tax reform 2.0,” including tax cuts for middle-income taxpayers. That could mean reducing the marginal tax rate from 22% to 15% for single filers making between $40,126 and $85,525 and for married couples filing jointly and making between $80,251 and $171,050. He also has noted that he wants to make the reductions in individual income taxes that were part of the Tax Cuts and Jobs Act permanent.
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Joe Biden, former vice president
The former vice president has proposed increasing income taxes for high-income individuals, expanding the earned income tax credit and premium. His proposals include reverting the top income tax rate back to 39.6% from the current 37% for income over $510,000. He also would limit itemized deductions to just a 28% reduction of tax liability.
When it comes to capital gains, Biden proposes taxing households making more than $1 million at 39.6%, the same rate as ordinary income, plus a 3.8% net investment income tax. Unlike other Democratic contenders, he does not propose a wealth tax.
Image Credit: Gage Skidmore.
Sen. Bernie Sanders, (I – Vt.)
The Vermont senator has a plan that would increase income taxes for very high–income taxpayers, levy a wealth tax on very wealthy individuals and also increase estate taxes. According to the Tax Foundation, Sanders would raise higher-income tax brackets from 35% to 40%, while adding additional brackets at 45% for households making between $500,000 and $2 million; 50% for households making between $2 million and $10 million; and 52% for households making more than $10 million. He also wants to include stocks options when factoring a person’s income tax obligation once those options vest. This would be applied to anyone earning more than $130,000.
Sanders “extreme wealth tax” would incrementally tax people with assets in excess of $32 million. The amounts vary as follows:
- 1% on net worth above $32 million
- 2% on net worth from $50 million to $250 million
- 3% on net worth of $250 million to $500 million
- 4% on net worth of $500 million to $1 billion
- 5% on net worth from $1 billion to $2.5 billion
- 7% on net worth from $2.5 billion to $5 billion
- 8% on net worth over $10 billion
Related: Here’s where the presidential candidates stand on student loans
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Sen. Elizabeth Warren, (D-Mass.)
Senator Warren’s plan would increase income taxes for high-income taxpayers and would levy a wealth tax and increase estate taxes. Warren would increase the top income tax rate from 37% back to 39.6%, and levy a 14.8% high-income social security tax on earners in the top tax bracket.
She also has proposed a two-tiered wealth tax of 2% on taxpayers with wealth over $50 million, and 6% for wealth above $1 billion. She also has proposed taxing capital gains at ordinary income rates for the wealthiest 1% while also requiring these individuals to pay a yearly tax on the appreciation of assets.
Image Credit: Gage Skidmore.
Michael Bloomberg, former New York City mayor
The former New York City mayor has proposed increasing income taxes on high-income individuals, expanding the child tax credit, the earned income tax credit and the premium tax credit. He also plans to increase estate taxes, tax securities purchases and transactions involving derivatives, and levy a tax on the wealthy.
Bloomberg’s plan calls for increasing the top tax rate from 37% to 39.6%, taxing capital gains above $1 million at the same rate as regular income for all taxpayers and putting a 5% surtax on all income, earned or unearned, for taxpayers with income levels over $5 million.
This article was produced and syndicated by MediaFeed.org.
Image Credit: Ralph Alswang.
