Mind and Destiny

“I make no pretension to patriotism. So long as my voice can be heard ... I will hold up America to the lightning scorn of moral indignation. In doing this, I shall feel myself discharging the duty of a true patriot; for he is a lover of his country who rebukes and does not excuse its sins. It is righteousness that exalteth a nation while sin is a reproach to any people.”- Frederick Douglass

Location: Delhi, N.Y., United States

The author and his webmaster, summer of 1965.

Wednesday, August 24, 2016

Hillary’s Economic Plan

The top 1 percent are defined as households making more than $730,000 a year.  Reportedly, the top 1 percent of households would see their taxes go up by more than $78,000 on average under Hillary Clinton’s economic plan.  The plan would require that the top 1 percent pay more than three-quarters of tax increases, and the majority of tax filers would see little change in their after-tax income.

Clinton’s tax plan would reduce deficits in the first decade by $1.1 trillion and by another $2.1 trillion in the following decade.

She would impose the so-called Buffett Rule, that requires those with adjusted gross incomes over $1 million to pay a minimum of 30 percent of their income in taxes.  Furthermore, the plan would impose a 4 percent surcharge on adjusted gross income over $5 million.

Clinton’s plan would limit the value of certain deductions and exclusions to 28 percent.  Thereby, reducing the benefit of tax breaks for anyone in tax brackets higher than 28 percent.

Individually and combined those measures would make figuring one's tax liability harder.  For instance, filers would need to compare their tax bill under both the regular code and the Alternative Minimum Tax to what they would owe under the Buffett Rule, and pay whichever is highest.

Capital gains are a major source of wealth for very high-income filers, who make more than $400,000.  Under today's tax code, they pay a 20 percent tax on realized gains from investments held more than a year.  Clinton would preserve that rate, but only for investments held at least six years.  Under her plan, realized gains on investments held less than six years would be taxed on a sliding scale.  The top capital gains tax rate would then fall by about 4 percentage points each year thereafter until it reaches 20 percent in year six.

Clinton’s plan would require so-called carried interest to be taxed as ordinary income.  Carried interest is a portion of investment profits paid to managers of hedge funds, venture capital funds, and other private equity funds.

Money and assets left to heirs would be taxed more heavily if they come from larger estate.  Estates worth more than $3.5 million ($7 million for married couples.)  Hillary Clinton’s plan would also raise the top estate tax rate to 45 percent from 40 percent.


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