Hillary Clinton’s proposed tax plan would raise taxes by $498 billion over the next decade and would reduce the economy’s size by 1 percent, according to analysis by the Tax Foundation.
In order to pay for the new and expanded government programs Clinton has touted on the campaign trail, her proposed tax plan will increase marginal tax rates on income, labor, and capital, a move that will in turn reduce GDP, lower wages, and eliminate jobs.
Most of the $498 billion in tax revenue over the next decade would come from individual income taxes, the estate tax, and taxes on corporations.
According to the Tax Foundation, Clinton’s plan would increase marginal rates for taxpayers with incomes over $5 million, establish a 30 percent minimum tax on taxpayers who earn more than $1 million, cap itemized deductions to a tax value of 28 percent, and alter the long-term capital gains schedule.
According to a recent report from the Congressional Budget Office, even without Clinton’s tax plan, the nation’s GDP is projected to increase at a rate much lower than in recent decades. Clinton’s plan would lower the growth rate even further, as its proposed marginal tax rate increases on labor and capital would reduce GDP by 1 percent in the long term.
“We must drive steady income growth that lifts up families, and lifts up our economy,” Clinton said in a speech last July.
“Wages need to rise to keep up with costs, paychecks need to grow,” Clinton said. “We must raise incomes for hard-working Americans, so they can afford a middle-class life.”
According to the analysis, Clinton’s plan would lead to 0.9 percent lower after-tax incomes for all taxpayers, 311,000 fewer full-time jobs, and a 2.8 percent smaller capital stock.
“The slightly smaller economy would reduce wages, which would narrow the revenue gain from the individual income tax changes to about $173 billion and reduce payroll tax revenue by about $80 billion over the next decade,” the report states.
The Clinton campaign did not respond to requests for comment by press time.
Update 1:53 p.m.: Following publication of this article, Republican National Committee Chairman Reince Priebus called Clinton’s tax plan “an absolute disaster.”
“Hillary Clinton’s tax hike plan is an absolute disaster,” he said. “Not only do Clinton’s tax increases fail to pay for her $1.2 trillion spending spree, they will slow economic growth, drive down wages, and kill the equivalent of hundreds of thousands of full-time jobs.”