As currently presented, the Trump tax proposals would reduce taxes on all taxpayers regardless of income level. This should increase efficiency and spur faster economic growth.
Dallas, TX (PRWEB) September 22, 2016
Who benefits the most from the tax plans presented by presidential candidates Clinton and Trump? Detailed studies analyzing the tax reforms proposed by the candidates were presented today by National Center for Policy Analysis experts at a Capitol Hill briefing.
According to results from the NCPA's modeling of the U.S. economy, conducted in partnership with Dr. David Tuerck and his team at the Beacon Hill Institute, Trump's plan would promote economic growth:
-- In the first year (2017), real GDP would increase $985 billion, representing a growth rate of 5.64 percent above Congressional Budget Office baseline estimates. In 2026, this growth rate would increase to 9.36 percent.
-- Personal income in 2017 would be $646 billion more than CBO baseline estimates, a growth rate of 3.83 percent. In 2026, this growth rate would increase to 5.64 percent.
-- Business investment would increase by $191 billion in 2017, representing a 7.16percent growth. In 2026, this would increase to a substantial 11.72 percent above CBO baseline estimates.
However, Trump's plan would reduce federal revenues $7.4 trillion over 10 years (2017 to 2026) compared to CBO baseline estimates.
-- The largest revenue reductions would come from the personal income tax and corporate income tax, which would fall 28 percent and 67 percent, respectively, over 10 years.
-- Payroll tax revenues would increase 3.8 percent due to more people working and more income growth.
-- However, state and local tax revenues would increase $1 trillion over 10 years.
The bottom line on Trump’s tax plan: “As currently presented, the Trump tax proposals would reduce taxes on all taxpayers regardless of income level. This should increase efficiency and spur faster economic growth,” says NCPA Senior Fellow and Director of the Beacon Hill Institute Dr. David Tuerck.
Previous NCPA research on Clinton’s plan found that while government jobs would increase, private sector jobs, personal income, GDP growth and business investment would all fall:
-- In 2017, 49,000 government jobs would be created but 207,000 private sector jobs would be lost. By 2026, every government job created would cost five private sector jobs.
-- In the first year, real GDP would be more than half a percent less than under the Congressional Budget Office's current baseline estimate, and almost 1 percent less in 2026.
-- Personal income would be $47 billion less in 2017 alone; this loss would increase to $103 billion in 2026.
Unfortunately the revenue raised by Clinton’s plan would fall short of her planned spending projects. Compared to Congressional Budget Office estimates:
-- From 2017 to 2026, personal income tax and corporate tax revenue will increase 3.4 percent and 1.2 percent respectively.
-- Estate tax revenues will increase 30 percent due to Hillary’s plan to increase the marginal rate and lower the exemption amount on estates.
-- However, Social Security payroll tax revenue and state and local revenues will be slightly lower due to fewer people working and reduced economic activity.
The bottom line on Clinton’s tax plan: “Hillary’s plan is simply a continuation of the slow-growing Obama economy, except worse,” warns NCPA Senior Fellow Pam Villarreal.
Who Benefits the Most from Trump and Clinton’s Tax Plans?: http://www.ncpa.org/pub/who-benefits-the-most-from-clinton-and-trump-s-tax-plans
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. We bring together the best and brightest minds to tackle the country's most difficult public policy problems — in health care, taxes, retirement, education, energy and the environment. Visit our website today for more information.