The 2016 Democrat Candidates and Taxes
The two main Presidential candidates for the Democrats are Senator Bernie Sanders and former Secretary of State Hillary Clinton. Both candidates favor raising taxes, especially on those Americans who earn higher incomes. Bernie Sanders has called for a top marginal income tax rate of 90% and to increase the death tax so that “Trump and his billionaire friends and their families will end up paying more.” Marginal tax rate means the rate on the next dollar that is earned. The death tax is paid by a person’s estate when they die. This means, there is a tax on dying.
The 2016 Republican Candidates and Taxes
There are many Republican candidates, but the top in polling seem to be Donald Trump, Senator Ted Cruz, Senator Marco Rubio, Ben Carson, former governor Jeb Bush, governor Kasich and governor Christie. Each has their own tax plan, but they all intend to cut income taxes and business taxes from their current rates. One of the biggest tax cuts appear to be from candidate Ben Carson, who favors a 14.9% flat tax on income, and a reduction to “0” of all capital gains tax.
Goals of Taxation
One of the most recognized goals of taxation is to raise revenue to pay for government programs. The U.S. government supplies an army and runs social welfare programs like Social Security and Medicare. Some argue that it is unfair that others make more money than some, and thus, some politicians see taxation as a way to make people’s income the same.
Taxes, Presidents, and History
There may be differences of opinion on tax cuts and how they affect the government, but there is only one history. Since 1962, we have three instances in history where the U.S. government has drastically cut taxes. President John F. Kennedy cut the top tax rate from 90% to 71% in 1962. In the 1980s, President Ronald Reagan cut the top tax rate from 70% to 50% in 1981, and then in 1986, he dropped the top tax rate to 28%. In the 2000s, President Bush cut income taxes from a high of 39.6% to 35%. In each of these largest tax cuts in the past 60 years during each President’s terms, revenue to the U.S. government grew, individual income grew, unemployment fell, and the gross domestic product grew over 3.5%. What appears to have happened is that because individuals were allowed to keep more of their money, they invested it into businesses or spent more on consumer goods. This seems to have increased the overall growth of the economy.
President Obama and Taxes
In the last 7 years, President Obama has raised taxes many times, including 22 different taxes including in the Affordable Care Act (ObamaCare). During his presidency, revenue to the U.S. government has grown, however, individual income has fallen, the number of people unemployed has grown to 92.5 million people, and gross domestic product has grown at a 2% rate. While there are other factors affecting the economy, tax policy is one of the most consequential.
- Who are the main Presidential candidates for Democrats and Republicans?
- How do the candidates for the political parties differ in how they view tax policy?
- What are at least two goals of tax policy?
- What affects might the tax cuts of Kennedy, Reagan and Bush have had on the U.S.?
- What affects might the tax hikes of President Obama have had on the U.S.?