Analysis of 2020 Democratic Tax Plans

As the 2020 Democratic presidential campaigns ramp up, our experts provide leading research and analysis on the latest tax proposals, including a wealth tax, a financial transaction tax, corporate tax increase, and payroll tax increase.

How do the 2020 tax plans compare? Explore our resources below to see where the 2020 candidates stand on taxes.

Compare the 2020 Presidential Tax Plans

See the detailed tax changes being proposed by each candidate.

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Analysis by Candidate

Analysis of Capital Gains Tax Proposals Among Democratic Presidential Candidates

March 18, 2020

Joe Biden and Bernie Sanders have both released proposals to tax capital gains at ordinary income rates for the wealthiest Americans. As part of a broader platform to address income inequality, Biden and Sanders suggest increasing current capital gains rates on taxpayers with income over $1 million and $250,000, respectively.

Analysis of Democratic Presidential Candidate Individual Income Tax Proposals

March 11, 2020

Joe Biden and Bernie Sanders have each proposed changes to the individual income tax, one of the largest sources of federal revenue. Our new analysis compares the economic, revenue, and distributional effects of the various proposals.

Summary of the Latest Federal Income Tax Data, 2020 Update

February 25, 2020

The latest IRS data shows that the U.S. individual income tax continues to be very progressive, borne primarily by the highest income earners. The top 1 percent of taxpayers pay a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent).

Insights into the Tax Systems of Scandinavian Countries

February 24, 2020

Sen. Bernie Sanders often refers to tax systems in Scandinavian countries like Denmark and Sweden. But how do Scandinavian countries really pay for their government spending?

Analysis of Democratic Presidential Candidates Corporate Income Tax Proposals

February 19, 2020

2020 Democratic presidential candidates have proposed various changes to the corporate income tax, which includes increasing the rate, ranging from 25 percent to 35 percent, imposing a corporate surtax or a minimum tax, and lengthening depreciation schedules.

Analysis of Democratic Presidential Candidate Payroll Tax Proposals

February 11, 2020

Several 2020 Democratic presidential candidates have proposed changes to federal payroll tax rates and the Social Security payroll tax wage base to raise revenue and maintain solvency for major federal entitlement programs.

Analysis of Sen. Warren and Sen. Sanders’ Wealth Tax Plans

January 27, 2020

New modeling finds that the wealth taxes proposed by Sen. Warren and Sen. Sanders would raise significantly less revenue than promised, face serious administrative and compliance challenges, and would increase foreign ownership of U.S. capital.

Comparing Ordinary Income Tax Rate Proposals by 2020 Presidential Candidates

November 20, 2019

Senator Sanders Proposes a Tax on “Extreme” Wealth

September 25, 2019

Bernie Sanders recently became the second major Democratic presidential candidate to propose a wealth tax.

Sanders’ Estate Tax Plan Won’t Likely Raise the Revenue Intended

January 31, 2019

A Financial Transactions Tax Is A Retread of Bad Ideas

June 20, 2018

Analysis of Capital Gains Tax Proposals Among Democratic Presidential Candidates

March 18, 2020

Joe Biden and Bernie Sanders have both released proposals to tax capital gains at ordinary income rates for the wealthiest Americans. As part of a broader platform to address income inequality, Biden and Sanders suggest increasing current capital gains rates on taxpayers with income over $1 million and $250,000, respectively.

Analysis of Democratic Presidential Candidate Individual Income Tax Proposals

March 11, 2020

Joe Biden and Bernie Sanders have each proposed changes to the individual income tax, one of the largest sources of federal revenue. Our new analysis compares the economic, revenue, and distributional effects of the various proposals.

Analysis of Democratic Presidential Candidates Corporate Income Tax Proposals

February 19, 2020

2020 Democratic presidential candidates have proposed various changes to the corporate income tax, which includes increasing the rate, ranging from 25 percent to 35 percent, imposing a corporate surtax or a minimum tax, and lengthening depreciation schedules.

Analysis of Democratic Presidential Candidate Payroll Tax Proposals

February 11, 2020

Several 2020 Democratic presidential candidates have proposed changes to federal payroll tax rates and the Social Security payroll tax wage base to raise revenue and maintain solvency for major federal entitlement programs.

Biden’s Minimum Book Income Tax Proposal Would Create Needless Complexity

December 13, 2019

Comparing Ordinary Income Tax Rate Proposals by 2020 Presidential Candidates

November 20, 2019

Unpacking Biden’s Tax Plan for Capital Gains

July 31, 2019

Proposed Corporate Rate Hike Would Damage Economic Output

August 23, 2018

Raising the corporate tax rate would reduce economic growth and lead to a smaller capital stock, lower wage growth, and reduced employment.

Analysis of Democratic Presidential Candidates Corporate Income Tax Proposals

February 19, 2020

2020 Democratic presidential candidates have proposed various changes to the corporate income tax, which includes increasing the rate, ranging from 25 percent to 35 percent, imposing a corporate surtax or a minimum tax, and lengthening depreciation schedules.

Analysis of Democratic Presidential Candidate Payroll Tax Proposals

February 11, 2020

Several 2020 Democratic presidential candidates have proposed changes to federal payroll tax rates and the Social Security payroll tax wage base to raise revenue and maintain solvency for major federal entitlement programs.

Comparing Capital Gains Tax Proposals by 2020 Presidential Candidates

December 4, 2019

Comparing Ordinary Income Tax Rate Proposals by 2020 Presidential Candidates

November 20, 2019

Wealth Taxes in Europe

November 20, 2019

Tracking the 2020 Presidential Tax Plans

November 20, 2019

As the 2020 Democratic presidential field continues to narrow, review the latest campaign tax proposals, including a wealth tax, financial transaction tax, universal basic income, and a surtax on corporate profits.

Proponents of Wealth Taxation Must Consider its Impact on Innovation

November 12, 2019

Business in America

May 28, 2019

Who are the workers, consumers, and shareholders who interact with businesses in the U.S.? What forms do these businesses take? How do business taxes impact people’s lives? It is essential we answer these questions in order to design a business tax system that is simple, efficient, and enables economic progress.

Putting a Face on America’s Tax Returns

March 11, 2019

Who really bears the burden of federal taxes? Who benefits from credits and deductions and by how much? How progressive is our current tax system and what role do taxes play in the debate over income inequality?

How Much Revenue Would a 70% Top Tax Rate Raise? An Initial Analysis

January 14, 2019

Due to a narrow tax base and a decrease in capital gains realizations, Congresswoman Ocasio-Cortez's plan to tax income above $10 million would not raise as much revenue as intended. See our 10-year revenue estimates.

Proposed Corporate Rate Hike Would Damage Economic Output

August 23, 2018

Raising the corporate tax rate would reduce economic growth and lead to a smaller capital stock, lower wage growth, and reduced employment.

Modeling by Tax Topic

Wealth Tax Proposal Estimates

Wealth taxes on ultra-wealthy households have been proposed by Democratic presidential candidates to fight against inequality and raise extra revenue but there is substantial uncertainty about how much revenue can be raised.

Comparing wealth taxes to income taxes shows how seemingly low rates on wealth equate to high income tax rates. Wealth taxes in European countries have had disappointing results and many have been phased out. A wealth tax would face serious administrative and compliance challenges due to valuation difficulties and tax evasion and avoidance issues.

A wealth tax would also induce foreign inflows of hundreds of billions of dollars a year to replace reductions in U.S. savings, which would cause international investors to replace home-grown billionaires as owners of capital.

Summary of Wealth Tax Proposal Estimates

Source: Tax Foundation General Equilibrium Model

  Sen. Sanders (I-VT) Sen. Warren (D-MA)
Conventional Revenue, 2020-2029 (Billions) $3,261 $2,636
Dynamic Revenue, 2020-2029 (Billions) $2,555 $2,193
Gross Domestic Product (GDP) -0.43% -0.37%
Gross National Product (GNP) -1.65% -1.15%
Capital Stock -0.81% -0.69%
Wealth -10.21% -7.19%
See Full Wealth Tax Estimate

Corporate Tax Proposal Estimates

2020 Democratic presidential candidates have proposed various changes to the corporate income tax to raise revenue for their policy proposals.

This includes increasing the corporate income tax rate, ranging from 25 percent to 35 percent, imposing a corporate surtax or a minimum tax, and lengthening depreciation schedules.

The effect of each of these proposals will be to increase the cost of capital in the United States, making it more expensive for businesses to make productivity-enhancing investments, and by doing so, reduce economic output, wages, and employment. 

Summary of Democratic Presidential Corporate Tax Proposal Estimates

*Sen. Klobuchar has proposed a variety of corporate tax rate increases, ranging from 25 percent to fund infrastructure improvements, 27 percent to fund deficit reduction, and 28 percent to fund child care and paid family leave, and has mentioned in debates that she would repeal the Tax Cuts and Jobs Act corporate tax rate.

Source: Tax Foundation General Equilibrium Model, November 2019.

  Fmr. Vice President Biden (D) Fmr. Mayor Bloomberg (D) Fmr. Mayor Buttigieg (D) Sen. Klobuchar (D-MN) Sen. Sanders (I-VT) Sen. Warren (D-MA)
Plan Details 28% corporate income tax rate and 15% minimum tax on book income 28% corporate income tax rate 35% corporate income tax rate 25% corporate income tax rate* 35% corporate income tax rate and economic depreciation for all investments 35% corporate income tax rate and 7% surtax on book income
Static Revenue, 2020-2029 (Billions) $1,553 $1,253 $2,507 $716 $3,871 $3,379
Dynamic Revenue, 2020-2029 (Billions) $1,351 $1,093 $2,149 $629 $2,689 $2,683
Gross Domestic Product (GDP) -1.20% -1.00% -2.10% -0.50% -3.80% -3.70%
Capital Stock -2.90% -2.30% -5.10% -1.30% -9.10% -8.70%
Wage Rate -1.00% -0.80% -1.80% -0.40% -3.20% -3.10%
Full-time Equivalent Jobs -236,000 -187,000 -413,000 -103,000 -755,000 -722,000
See Full Corporate Tax Estimate

Payroll Tax Proposal Estimates

2020 Democratic presidential candidates have proposed various payroll tax changes to raise revenue and maintain solvency for major federal programs.

This includes levying Social Security payroll taxes on taxpayers with high wages, raising the Social Security payroll tax rate, and enacting new payroll taxes to fund new federal programs.

Each proposed change to payroll taxes levied on wages would make the tax code more progressive but would also reduce after-tax incomes for most wage earners. This is because employees fully bear the economic burden of payroll taxes, lowering the incentive to work and reducing economic output.

Summary of Democratic Presidential Payroll Tax Proposal Estimates

Source: Tax Foundation General Equilibrium Model, November 2019.

  Fmr. Vice President Biden (D) Fmr. Mayor Buttigieg (D) Sen. Klobuchar (D-MN) Sen. Sanders (I-VT) Sen. Warren (D-MA)
Plan Details 12.4% Social Security payroll tax on wages above $400,000 12.4% Social Security payroll tax on wages above $250,000 12.4% Social Security payroll tax on wages above $250,000 7.5% payroll tax on employers with a $2 million payroll exemption and 12.4% Social Security payroll tax on wages above $250,000 14.8%Social Security payroll tax on wages above $250,000
Conventional Revenue, 2021-2030 (Billions) $808 $1,556 $1,556 $5,505 $1,890
Dynamic Revenue, 2021-2030 (Billions) $657 $1,302 $1,302 $4,677 $1,573
Gross Domestic Product (GDP) -0.28% -0.36% -0.36% -1.17% -0.41%
Capital Stock -0.33% -0.42% -0.42% -1.33% -0.48%
Full-time Equivalent Jobs -350,400 -462,500 -462,500 -1,570,000 -532,500
See Full Payroll Tax Estimate

Individual Income Tax Proposal Estimates

The major 2020 Democratic presidential candidates have each proposed changes to the individual income tax, one of the largest sources of federal revenue.

These proposals range from raising the top marginal income tax rate to 39.6 percent, imposing surtaxes on labor and investment income, and repealing provisions of the Tax Cuts and Jobs Act (TCJA).

Summary of Democratic Presidential Individual Income Tax Proposal Estimates

Source: Tax Foundation General Equilibrium Model, November 2019.

  Biden Sanders
Plan Details Raise 37% tax bracket rate to 39.6% Impose a 52% tax rate on incomes over $10 million, impose a 4% income-based premium on all income, repeal the Section 199A pass-through deduction
Conventional Revenue, 2020-2029 (Billions of Dollars) $109.0 $3,168.4
Dynamic Revenue, 2020-2029 (Billions of Dollars) $84.0 $2,169.5
Gross Domestic Product (GDP) 0% -2.04%
Capital Stock 0% -2.54%
Full-time Equivalent Jobs 0 -1,532,000
See Full Individual Income Tax Estimate

Capital Gains Tax Proposal Estimates

Summary of Democratic Presidential Capital Gains Tax Proposal Estimates
  Biden Sanders
Plan Details Repeal step-up in basis. Raise capital gains taxes to ordinary income rates for those with >$ 1 million Raise capital gains taxes to ordinary income rates for those with >$250,000. Institute a 4 percent income premium on capital gains
Conventional Revenue, 2020-2029 (Billions of Dollars $451 $28
Dynamic Revenue, 2020-2029 (Billions of Dollars) $418 -$10
Gross Domestic Product (GDP) -0.03% -0.07%
Gross National Product (GNP) -0.21% -0.20%
Capital Stock -0.02% -0.08%
Full-time Equivalent jobs -400 -41,000

Source: Tax Foundation General Equilibrium Model, November 2019.

See Full Capital Gains Tax Estimate

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