A Brief Overview
The nastiest presidential campaign in memory is drawing to a close. On the off chance that any truly undecided voters want to base their decisions on the actual policies put forth by Donald Trump and Hillary Clinton, we’ve put together a quick overview on their positions regarding retirement programs, taxes and general economic policy. Thanks to Great Waters Financial for providing much of the source material.
Medicare and Social Security
Like many of his public statements, Trump’s retirement program proposals are vague and contradictory.
With regards to Social Security, he is on the record saying that his administration will address “the tremendous waste, fraud, and abuse in [Social Security]…But we’re not going to hurt the people who have been paying into Social Security their whole life and then all of a sudden they’re supposed to get less.” It is not clear how he plans to accomplish this.
With regards to Medicare, Trump proposes negotiating with drug companies to lower drug prices, a practice that’s currently banned by an act of Congress thanks to intense lobbying by big pharmaceutical companies. He also proposes repealing the Affordable Care Act, though his plans for a replacement are unclear beyond a scheme that allows insurance companies to offer policies across state lines.
Clinton advocates maintaining Social Security’s status quo with regards to benefits, cost of living adjustments (COLAs), and the retirement age. She proposes staving off the program’s projected funding shortfall by raising the taxable earnings cap (currently $118,000). She also proposes a “caregiver credit” that compensates caregivers who need to leave the workforce to care for chronically ill family members.
On Medicare, Clinton advocates easing restrictions on importing lower-cost drugs from countries with rigorous safety standards, negotiating with drug companies to lower drug prices, and “bundling services more efficiently” to reduce waste and cut costs.
Trump proposes simplifying the tax code by reducing the current seven brackets to three: 35%, 25%, and 12%. He also proposes a steeper itemized deduction phase-out for high earners; a dramatically lower corporate tax rate (including pass-through income) to 15%, down from 35%; and the elimination of the estate tax, which currently has an exemption of $5.45 million.
Clinton proposes a 4% surcharge on incomes greater than $5 million and a minimum tax rate of 30% on incomes greater than $1 million. She also proposes capping deductions for the proverbial 1% at approximately $78,000 per year; lowering the estate tax exemption to $3.5 million and raising the rate to 45%; and keeping tax rates steady for individual taxpayers in the bottom 95%.
Trump has proposed loosening banking and environmental regulations, backing out of or “renegotiating” global trade deals, and eliminating the federal minimum wage.
Clinton proposes raising the federal minimum wage to $12 to $15; instituting paid family and medical leave for 12 weeks at no cost to businesses; launching or strengthening incentives aimed at revitalizing distressed manufacturing centers; increasing efforts to enforce trade agreements; invest about $275 billion in infrastructure projects over five years; and strengthen banking regulations passed in the wake of the financial crisis.