Six Democratic Candidates and the Tax Plans they Wish to Employ

Six Democratic Candidates and the Tax Plans they Wish to Employ

The 2017 Tax Cuts and Jobs Act wrought sweeping changes throughout the Internal Revenue Code. As the race continues to see which candidate will face President Donald Trump in the 2020 election; STA explores a brief overview of Joe Biden’s, Bernie Sanders’, Elizabeth Warren’s, Kamala Harris’, Pete Buttigieg’s, and Cory Booker’s tax plans.

Joe Biden

• Former Vice President Joe Biden would raise the highest personal marginal tax rate from 37% to 39.6%;
• Increase the corporate income tax rate from 21% to 28%;
• Make all earned income subject to the social security share of the payroll tax;
• Allow low-income taxpayers over age 65 to claim the earned income tax credit;
• No longer allow taxpayers to step-up their basis for inherited capital assets; and
• Double the capital gains tax for taxpayers earning over $1 million

 

• As the lead sponsor of the “Inclusive Prosperity Act of 2019,” Vermont Senator Bernie Sanders proposes a 0.5% tax on trading stock, a 0.1% tax on trading bonds.
• To finance his healthcare plan, “Medicare For All,” Senator Sanders would “require employees to pay a 4% income-based premium (exempting the first $29,000);
• Require employers to pay a 7.5% premium (exempting the first $2 million in payroll);
• Limit tax deductions for taxpayers in the top bracket;”
• “Raise the current 20% top rate on long-term capital gains and dividend income to match the 37% rate on wages and salaries;”[1] and
• Implement 77% maximum tax rate on all inheritance income exceeding $1 billion.[2]
• As the lead sponsor of the “For the 99.8 Percent Act,” Senator Sanders would reduce the lifetime gift and estate tax exemption from $11.4 million to $3.5 million.

 

• Massachusetts Senator Elizabeth Warren will implement a wealth tax of “2% on net worth[3] above $50 million and 3% on net worth above $1 billion;”[4] and
• Impose a 7% corporate tax on all company profits over $100 million.
• Cosponsoring the “Working Families Tax Relief Act of 2019,” Senator Warren would expand the Earned Income Tax Credit by 25% for families with children;
• Make the Child Tax Credit fully refundable; and
• Create a Young Child Tax Credit for taxpayers with children under 6 years old.
• Cosponsoring the “American Family Act of 2019,” Senator Warren would increase the Child Tax Credit from $2,000 a year to $3,000 for children ages 6 to 16 and $3,600 for children 5 years old and under.
• Cosponsoring the “FAMILY ACT,” Senator Warren would levy a 0.2% tax on employee’s wages to fund 12 weeks of paid family leave and split this tax between employers and employees.