Hillary's Tax Plan Will Cost Everybody, Not Just the Rich
Presidential candidate Hillary Clinton has proposed a number of changes to the income tax code, targeted mainly at high-income earners. The tax changes would have little impact on 90 percent of the population in terms of tax liability. However, households in the top ten percent of the income distribution, who currently pay 53 percent of all federal taxes, would pay 80 percent of the additional tax collected.
What would affect other income deciles is the fall in income due to recessionary effects of the income tax hikes [see the table]. Our dynamic analysis shows:
- The top 10 percent of earners would lose nearly 2 percent of broadly measured income in 2017 alone.
- This is not surprising considering Hillary's motive for taxing the rich, but what is particularly startling is that incomes in all other deciles except for one would also fall.
- In fact, the poorest 10 percent would lose 0.7 percent of their broadly measured income. This is the largest loss among the bottom 90 percent of deciles!