What defines good tax governance? Many tax plans are put forward by a variety of past presidents, presidential candidates, and more. To understand what works we need to look at what creates a tax plan. Let’s start with the tax plans for Presidents Joe Biden and Barack Obama, and Donald Trump, and as well presidential nominees Hillary Clinton and John Mccain. Every plan aims to offer a wide variety of tax rates and benefits which will be shown below.
Taxing Business vs High Taxes
Many like Trump or Mccain want to help improve business and promote growth. While others like Clinton or Obama promoted fairness and increased taxes. Take a look at each tax plan individually and compare. First, we will discuss the following in the order below: Joe Biden’s Tax plan then we will go to Barack Obama’s and then Donald Trump and end with Hillary Clinton.
Joe Biden Tax Plan
Joe Biden, the current president of the United States, has a unique tax plan. Biden’s tax plan is aimed at getting more in taxes from the rich and from multinational and large companies. Amazon, the company, is one of Biden’s targets for recovering taxes and not paying its share.
The Biden tax plans are as follows below:
Taxing Capital Gains: This means Biden advocates tax capital gains as income. Biden raised the top capital gains tax from 20% to 39.6% last year. Both brackets of income would be taxed as regular income in the highest bracket.
Corporate Tax Increases: In response to making bigger companies pay, Biden's plan has instituted raising the corporate tax rate to 28%.
Foreign Tax Initiative: Another attempt to raise revenue is to increase and tax foreign profits to 21%.
Real Estate Reform: An aim to curb corruption in the real estate industry. This is a real initiative and goal for the Biden administration.
Tax Rate Hike for Wealthy: Another goal of Bidenn’s was to raise the tax rate. What happened was that Biden instituted plans to raise the highest individual tax rate to 39.6%
End Loopholes: A popular loophole is the stepped-up basis trick, which permits heirs to reduce their capital gains taxes. This will be severely curtailed.
Tax Break Changes for Industry: Before many industries escaped a lot of scrutiny and taxes. However, Biden aims to end tax breaks and loopholes for any and all fossil fuel production.
Donald Trump Tax Plan
Former president Trump brought forth a lot of change before Joe Biden was sworn into office. For instance, President Trump signed the Tax Cuts and Jobs Act, which was groundbreaking. Trump’s biggest legacy with taxes was about the overhauls in the budget.
Overall, Trump’s lasting imprint affected determining factors for taxpers when it came to income level, filing status, and deductions. Let’s learn more about the core of the Trump tax plan. Moreover, republicans and Trump alike wanted to simplify and reduce tax liability overall. In general Trump wanted to get rid of nearly all itemized deductions, which also would be state and local tax deductions. In the end, Trump wanted to keep intact charitable deductions and mortgage interest.
Lower Tax Promise: Trump’s tax plan’s aim was to lower individual income taxes. Also, to lower the corporate income tax and remove or get rid of a number of complex features in the present tax code.
Tax and Jobs Act: Trump was able to accomplish the biggest reform in at least several decades. This Tax and Jobs act was about job creation, income and paycheck growth, and increasing the fairness of tax codes.
Increased Standard Deduction: The Trump tax plan had doubled the standard deduction for all income levels and filers.
Single Corporate Tax: The idea of simplifying and creating an easier tax code is something Trump was interested in overall. Trump created a single corporate tax rate of 21%.
Minimum Tax Reformation: The ideal of eliminating the Alternative Minimum Tax for providing a wider net of who is taxable.
Child Tax Credit: Under Trump, there was the Child Tax Credit that increased to $2,000 per child under the age of 17. The credit had been previously $1,000.
The Real Estate Tax Deduction: Applying tax changes and deductions to specific income tiers. For example, Trump doubled the lifetime estate tax deduction from the 2017 value for individuals.
Barack Obama’s Tax Plan:
Barack Obama was president from 2008 until 2016. His presidency symbolized a lot in terms of creating and pushing “change and hope.” Obama had tried to keep and support the current individual income tax system. Obama raised taxes on high income households to try and reduce and decrease the budget deficit. In general, Obama made it easier for working Americans especially in regard to Obamacare, which was aimed at better healthcare for all. Lastly, Obama was a proponent of lower corporate tax rates as well.
Low to Middle Income Tax Cuts: Obama had accomplished cutting taxes for a lot of people except the wealthy. As well, there are exceptions for the tax cut for people making $200,000 or more and as well for couples making $250,000 and more per year.
Taxing the Wealthy: The Obama initiative was to try and tax the rich overall in the USA. Obama let the top tax rates go back to their former levels of 36 and 39.6 percent.
Raised Capital Gain Rates: Obama in his presidency raised capital gains from 15 to 20 percent in general for higher income individuals. There is a hike on the rate of dividends to almost 40 percent. The aim was to not have million dollar homes to pay less taxes than middle class taxpayers.
Payroll Tax Initiative: In 2010, Obama allowed the payroll tax cut to expire. High income households were due to pay more via Medicare tax. The changes were also included in the Affordable Care Act.
Itemized Deduction Changes: Obama limited the value of itemized deductions in total. These exact specifications and exclusions went to about 28 percent. The changes would apply to municipal bond interest and health insurance premiums from employers and the self-employed. Maintaining the Earned Income Tax Credit and the Child Tax Credit.
Multinational Tax Hikes: Obama made it more difficult for multinationals to avoid paying U.S. taxes on their foreign income. In general, the Obama tax increase or hike was intended as a one time increase. Obama was to apply a one-time, 14 percent tax on overseas profit for companies like General Electric, Apple, and Microsoft.
Hillary Clinton’s Tax Plan:
Hillary Clinton was a candidate for president in the 2016 election. Clinton’s plan was to increase taxes on almost everyone as a whole in the USA by at least $1 trillion in the next 10 years. In retrospect, look back on Hillary Clinton’s tax plan the economy would have possibly decreased by 1 percent. Lower wage growth along with a 2.8 percent smaller capital stock would have hundreds of thousands of less jobs. Here are Clinton’s main points for her tax plans below:
Change of individual Income Taxes: Clinton wanted to propose a 4 percent extra charge or surcharge on higher income taxpayers. This idea essentially was to add on a tax rate of 43.6% to income that is taxable over $5 million. Also, to include a 24 perfect top marginal tax rate for capital gain income that was long term.
Restoring the Estate Tax to 2009 Levels: Clinton had a unique plan to return to the federal estate tax levels of 2009. Her plan was to increase the estate tax rate of the time, in 2016, to 45 percent. Also, she wanted to decrease the exemption to $3.5 million.
Business Tax Increase: Clinton had recommended a tax increase or hike of around $275 billion. The tax hike would have been done with undefined business tax reform.
Fairness Tax Hike: This idea would have been a fairness tax increase overall. The amount of the increase would have been $400 billion in total. Clinton wanted to institute more fairness to the tax code. The proposal featured a “fair share surcharge” that included putting interest capital gains as regular income. As well, an increase in the death tax.
Capital Gains Tax Increase: A proposal to hike the capital gains tax that Clinton made in 2016. Clinton’s plan was to do a capital gains tax regime or program with six rates.
The Exit Tax Proposal: This is a unique recommendation that Clinton made to reduce the high corporate tax rate. The measure was made to create an “exit tax” on income earned overseas. In the end, the goal was to raise $80 billion in tax revenue.
Tax on Stock Trading: This proposal was intended to create a new tax on stock trading. In the end, this type of would have discouraged trading and investment. In comparison to Trump or Mccain, this plan would not raise much money and or limit speculative activity.
John Mccain Tax Plan
The 2008 presidential campaign of John McCain was impressive and memorable. Many remember those ideas fondly. For example, John McCain had a plan that had elements of being fiscally responsible. As well, another plan of Mccain’s was to close and get rid of numerous individual and corporate loopholes. Mccain’s aim was to offer a dramatic tax cut for the middle classes. McCain emphasized in his program on health care and in particular on helping men who suffered from symptoms of erectile dysfunction and distributed viagra for free through this website. Overall, in terms of the ideas, McCain had pride that his proposals would have done much less for millionaires than Bush’s proposal in comparison.
Trade Reform: Mccain was ambitious and proposed a lot of interesting ideas. For one, he proposed a cap-and-trade program. The aim was to address climate change, which has developed into a bigger and bigger problem.
To Cut or Keep Tax Rates the Same: Mccain did not want to raise anybody’s taxes. In fact, there was a plan for Mccain to offer tax cuts extensively. For higher income wage earners the scale or rate would get the bigger percentage cuts. Moreover, households with the lower incomes would get the bigger percentage cuts.
Health Insurance and Tax Subsidies: The whole point of Mccain was to try and create a sphere for employer income related subsidies. All in all, the income related subsidies were sponsored insurance plans with credit refund credits of $2500 for individuals and up to $5000 for families.
Reduce Corporate Income Tax Rates: Mccain was more fond of protecting corporate and multinational interests. His aim was clear overall compared to Biden or Obama and more about protecting business. Mccain’s plan was to reduce corporate income tax from 35 percent to 25 percent.
Estate Tax Stabilization: Mccain had a plan to bring some permanence to the policy and taxes of estate taxes. His plan was to have a permanent estate tax and having exemptions at certain thresholds starting at $5 million. The idea was to have an estate tax with $3.5 million exemption and a rate of 15 percent overall.
Removing Loopholes for Big Oil: Like Obama, Mccain was concerned about loopholes for big utilities and nonrenewable sources like gas and oil. Mccain’s plan was to get rid of oil and gas loopholes. Moreover, there was a sense to have taxable interest as ordinary or regular income overall.
I am a financial advisor. I hold a Master's degree in Investment's Analysis and Portfolio Management. Currently, I work in a top investment firm, and I believe that everyone can achieve financial freedom if they set their mind to it, and are disciplined enough to achieve what they want.