The New Hampshire Winners Have the Most Radical Tax Plans
February 10, 2016
One notable characteristic of this year’s presidential primaries is that many candidates have put together detailed tax plans—some of which are substantial departures from the status quo. However, no candidates would change taxes nearly as much as the two winners of last night’s New Hampshire primaries: businessman Donald Trump and Senator Bernie Sanders.
Donald Trump’s plan cuts the top income tax rate to 25 percent (from a high of 39.6 percent) and extends a zero income tax bracket all the way up to $50,000 for married couples. These policy choices substantially reduce revenues (despite the campaign’s sometime protestations to the contrary.) Our analysis finds the plan would reduce projected revenues by $11.98 trillion over the first decade of enactment.
In contrast, Bernie Sanders’ plan is almost exactly the opposite. It introduces several new top tax brackets, many of them with marginal rates over 50 percent. Furthermore, it even increases taxes on low-income Americans, through its substantial use of new payroll taxes. On the whole, our analysis finds it would increase projected revenues by $13.57 trillion.
These plans would both be radical changes to the status quo; in fact, they change federal revenues by more than any other candidate plan. For some context, here’s how their plans look, in terms of revenue raised, compared to the plans of the Iowa caucus winners, Hillary Clinton and Ted Cruz:
New Hampshire and Iowa have now voted, but the remaining states are yet to vote in this primary season. Voters in those states should carefully consider their beliefs about the appropriate size of federal revenues, an issue on which the leading candidates so far differ dramatically.