What Could Your Tax Burden Be Under the Next President?

April 18, 2016

This election season, nearly every presidential candidate has released a detailed plan on how they would change the tax code. Some of these plans are small and would have a limited impact on taxpayers and economy. Other plans are big and would drastically impact federal revenues, the economy, and taxpayers. Using our Taxes and Growth (TAG) macroeconomic model, we analyzed how these plans would impact the economy, federal revenue, and the distribution of taxes paid.

While analyses like those are very important, these plan are complex and have a lot of moving parts. For many people, it is hard to understand how these plans will impact them. That is why we partnered with USA Today to build a simple tax calculator. This calculator allows you to enter your and your spouse’s income and the number of children you have. The calculator then tells you roughly what your tax bill is under current law and what it would be if Hillary Clinton, Ted Cruz, Bernie Sanders, and Donald Trump were able to enact their tax plan.

How does this calculator work?

The calculator takes you and your spouse’s income (if you are married) and the number of children you have. From there, it does a simple calculation to show, roughly, how much tax you owe under current law and how much more (or less) you would owe under each candidate’s tax plan. The calculator assumes that your income is all wage income and that you take the standard deduction. While this leaves out many details about how candidates will change itemized deductions and the treatment of capital gains, it does give a good idea of how these plans will impact a vast majority of people.

The calculator accounts for several provisions in the current tax code and several that would be introduced under each candidate’s plan. For current law, it accounts for the individual income tax, the employer- and employee-side payroll taxes, the Medicare surtax, the Child Tax Credit, the Earned Income Tax Credit, the Alternative Minimum Tax, and the personal exemption phase-out. The calculator accounts for the new value-added tax proposed by Ted Cruz, the Buffett Rule and 4 percent surtax proposed by Hillary Clinton, and the new payroll taxes proposed by Bernie Sanders.

Where is John Kasich?

John Kasich is missing because the specific details of his plan are missing. He has yet to propose new tax rates and tax brackets, which are needed in order to be part of this calculator.


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