Over the past few months, former Secretary of State and Senator Hillary Clinton has proposed a number of new and expanded government programs. In order to pay for these new or expanded services, she has proposed raising and enacting a number of new taxes. Her plan would increase marginal tax rates for taxpayers with incomes over $5 million, enact a 30 percent minimum tax (the Buffett Rule), alter the long-term capital gains tax rate schedule, and limit itemized deductions to a tax value of 28 percent. Her plan would also restore the estate tax to its 2009 parameters and would limit or eliminate other deductions for individuals and corporations.

Our analysis finds that the plan would increase revenue by $498 billion over the next decade. The plan would also increase marginal tax rates on both labor and capital. As a result, the plan would reduce the size of gross domestic product (GDP) by 1 percent over the long term. This reduction in GDP would translate into 0.8 percent lower wages and 311,000 fewer full-time equivalent jobs. Accounting for the economic effects of the tax changes, the plan would end up increasing federal tax revenues by $191 billion over the next decade.

Details of the Plan

Individual Income Tax Changes

• Creates a 4 percent “surcharge” on high-income taxpayers, which effectively adds an additional marginal tax rate of 43.6 percent for taxable income over $5 million and a 24 percent top marginal tax rate for qualified dividend and long-term capital gain income (Table 1).

Read the full article at the Tax Foundation: Details and Analysis of Hillary Clinton’s Tax Proposals