Hillary Clinton’s tax plan would reduce both wealthy Americans’ incomes and economic growth, a new report by the conservative-leaning Tax Foundation said Tuesday.
Clinton has said she would hike taxes on the rich in several ways, including creating a 4% surcharge on high-income taxpayers and establishing a 30% minimum tax on millionaires, known as the Buffett Rule. She would also raise rates on long-term capital gains.
These provisions would decrease after-tax income of the top 1% by 1.7% and of the top 10% by 0.7%, according to the Tax Foundation, and all Americans would see their incomes slip once reduced economic growth is factored in.
The Clinton campaign said the Tax Foundation’s analysis is misleading and doesn’t take into account her tax relief for businesses and individuals, nor her investments that would promote growth, said Brian Fallon, a Clinton campaign spokesman.
The foundation also estimates that Clinton’s tax plan would dampen the economy by 1% over the long run and shrink wages by 0.8% and jobs by 311,000.
Overall, her proposals would raise tax revenue by $498 billion over the next decade, though that estimate is reduced to $191 billion after taking weaker growth into account.
Clinton has repeatedly said that her tax plan would cover all of her spending proposals, which include investing in infrastructure, clean energy and medical research and making college more affordable, though she has not provided a lot of details. She has promised not to boost taxes on the middle class, while accusing rival Bernie Sanders of planning to raise taxes on everyone to fund his ambitious proposals, whose cost approaches $17 trillion over 10 years.
Sanders has laid out plans for extending Medicare-for-all, making tuition free at all public colleges and universities, rebuilding the nation’s crumbling roads and bridges, creating a million jobs for disadvantaged youth and mandating family leave.
To pay for it, he would raise taxes on the wealthy and corporations, but also hike some levies on all Americans. (The middle class would ultimately save money on his universal health care plan because they would no longer have to pay private insurance premiums, he argues.)
The foundation did not say whether Clinton’s tax plans would pay for her spending agenda.
The group has also scored the tax plans of several GOP presidential candidates, which have been cited in Republican debates.
For instance, it found that Trump’s plan to cut taxes would increase economic growth by 11%, raise wages by 6.5% and add 5.3 million jobs. But it would still cut a $10 trillion hole in tax revenues over the next decade.
