2016 has been quite an election year; we here at Orca have been following the debates, news reports, SNL skits and all the mud slinging and scandals. The one topic that has been the hardest to get the real facts for has been both candidates’ economic policies, and we here at Orca have done some fact checking and broken it down in the simplest form for you! 

Now it is key to remember that presidential candidates only determine a segment of taxes that you see on your paycheck, most importantly federal and payroll tax; We will be focusing on federal tax only, states and other taxes are determined by your state/local government not the dictated from Washington DC.

As we break this down into the Orca language we plan to focus on a few main categories, corporate taxes, federal income tax, capital gains, deductions, and national debt. This will give you quick idea of the effects and changes of each candidate’s proposed economic policy #podeducatation 

Side note: Deductions:  These are items on your return NOT subject to taxes that you can take a deduction to lower your taxable income. 

Donald Trump: 

• Changes the federal income tax bracket to 12% 25% and 33% (click here to see current tax bracket).

• Caps deductions for married couples at $200,000 (Meaning you can not take more than 200K worth of deductions a year) 

• Average child dependent care deduction will become what your state average is (Dependent care)

• Get rid of the Carried Interest loophole that is currently available to high net worth investors (Clinton agrees) 

• Get rid of personal exemption, so no $4,500 deduction for individuals. So everyone has more taxable income!

• Standard deductions to $30,000 from $12,000 for joint tax returns (Deduction married couples can take automatically). This will lower taxes for those who file 1040 EZ or don’t have houses or charitable deductions

• Corporate taxes reduced from 35% to 15% 

Yes, there is a benefit to lowering the tax rates, and the analysts agree it will increase growth in the short term.  Unfortunately the debt would grow under Trumps plan by $2.6 Trillion and that is the conservative outlook. Gross Domestic Product (GDP) to debt ratio would get over 100% which is scary territory. (click here to learn more about that). Overall Trumps plan calls for an overhaul of the current system and will actually lower the taxes for the Top 1% of Americans. 

Hillary Clinton: 

• Income of $5 million - taxes will go up from 39.6% to 43.6%

• Capital Gains Tax will increase from 20% to 24% again for incomes of 

$5 million+

• Majority of the Tax code stays the same for 90% of Americans.  

• Household that make over $1 million, would be required to pay 30% effective tax rate, no matter what deductions taken. 

• Carried Interest will be taxed as regular income instead of capital gains (Trump agrees) 

• Double the deductions for Child Care

• Add a new deduction for Elderly Care 

• Collect more taxes from Corporation and make them pay their share

Tax increases will lower the attractiveness of investment and probably slow the growth down but also creates new government revenue that can be used for healthcare and education. The analysts agree that Clinton plan would add about 200 billion worth of debt after 10 years, which is significantly lower than the debt that Trump plan will add. Clinton’s plan is geared towards the middle class and is not really changing much for anybody who is making under $250,000 besides adding some more tax deductions. 

The decision is yours, Trump’s plan is a major overhaul of our current tax system whereas Clinton’s is very similar to what we already have but changes the tax brackets for the wealthy. One crucial thing to understand is how it will affect you and the national debt (how it affects the next generation) and that is why we laid out the facts. (All information was sourced from taxpolcycenter.org, which is a non-biased tax analyst). 

Orca is not endorsing either party or candidate, we understand how messy this election has been and wanted to break it down as easy as possible to help our readers make the decision that benefits them and our country. Happy Voting!