Hillary Clinton wants roughly $550 billion in new taxes and fees over the next decade — affecting investment partnerships, large estates and banks — that have received little to no public discussion from her campaign, a report from a Washington-based policy group shows.
The new proposals, detailed in a report by the nonpartisan Committee for a Responsible Federal Budget, include plans for increasing the estate tax to a top rate of 65 percent on the very largest estates, levying a “risk fee” that would average about 0.13 percent on banks’ taxable assets and curbing a technique real estate investors use to minimize their tax bills.
“Some of these tax changes were added to her plan just this week,” according to the report, which is based on information provided by the Clinton campaign.
The changes mean that the tax plan will fall even more heavily on wealthy and high-earning taxpayers. She has already proposed a so-called “millionaire tax,” requiring people who earn more than $1 million a year to pay a minimum income-tax rate of 30 percent, and for those who make more than $5 million to pay a 4 percent surtax.
Clinton is proposing $250 billion in tax cuts for taxpayers with children, for child care expenses and for small businesses, and $140 billion in new health care and education spending, the report said.
Considering all of those provisions, the latest iteration of her revenue-and-spending plan would increase the national debt by $200 billion over 10 years — a figure that’s about $50 billion less than the budget-policy group estimated for an earlier version.
Republican presidential nominee Donald Trump — who recently revised his plan to offer tax cuts for individuals and corporations — would increase the debt by roughly $5.3 trillion over 10 years, the group’s report said. That figure is less than half the $11.5 trillion that the group estimated for his original plan.
Over the past week, both campaigns have given details about their tax plans to Washington-based policy analysts that differed from what they’ve made public. On Sept. 15, a Trump campaign adviser told the Tax Foundation that a key provision of Trump’s plan — a 15 percent tax rate for certain types of businesses — would apply only to corporations. But at the same time, Trump’s campaign told a small-business advocacy group that the rate would be available to small businesses.
The information that Clinton shared with the Committee for a Responsible Federal Budget is somewhat different. One proposal — to levy an existing 3.8 percent “net investment income tax” on income from partnerships, limited liability companies and other businesses known as “pass-throughs” — has been publicly available, though little-noticed.
“They shared it with us a month ago,” said Marc Goldwein, the Committee for a Responsible Federal Budget’s senior policy director, referring to Clinton’s campaign. “It’s not something they’re advertising.”
Pass-through businesses don’t pay taxes themselves, but pass their earnings through to their owners, who are taxed at their individual tax rates. The pass-through structure is used extensively by small businesses, investment partnerships and giant money managers.
Under current law, such businesses have been able to escape the investment-income tax, which was created by the Affordable Care Act. Ending that would generate about $250 billion in revenue over 10 years.
Another Clinton proposal — a risk fee for banks — was first proposed several months ago, though she provided little detail, the policy group said. It turns out the fee would be almost double what analysts expected, the report said. Analysts assumed that her proposal would be similar to one from President Obama, who had proposed a fee of seven basis points on the assets of large financial institutions. A basis point is the equivalent of 0.01 percentage point.
Instead, Clinton’s fee will use a sliding scale, based on size and risk, that averages about 13 basis points — almost twice as large as Obama’s proposal. As a result, the fee is estimated to raise about $50 billion more over 10 years.
When it comes to spending, Clinton’s published proposal for “debt-free college” for students from lower- and middle-income families who attend four-year institutions and for free community college would now cost $500 billion — a $150 billion increase from prior estimates, the committee’s analysis said.
That’s because the campaign now wants to also provide free tuition to students at in-state public universities if their families make less than $125,000 a year.