THE BLOG
11/04/2016 04:04 pm ET Updated Nov 05, 2017

Election Year: Tax Plans

It doesn't matter whether you lean slightly right or left or are well beyond the center, when it comes down to it one of the things that will directly impact your life is the tax policy of either candidate. Both presidential candidates have tax plans and as an informed taxpayer, you should know what the impact might be to you. That is, if the candidate who is elected sticks to their plan AND gets it through Congress AND passed into law.

This is not an endorsement for either candidate or plan, nor an assessment of likelihood or truth, but merely an exploration of what might happen to your taxes if X is elected based on what the tax plans state right now. In fact, when it comes to taxes, I rarely support one position over another. One because a plan or proposal is not a change until a new tax law is passed and that could take a very long time. Second, because at the end of the day, my goal is to help you understand how to apply the tax laws correctly and effectively so you can keep all the money you deserve.

To be honest, even after reading the plans, it was a bit difficult to decipher the actual implications. I used multiple sources, one because it was hard to find sources without bias and two so that if there was bias, at least I have other angles to review. If you want to do more research on your own, here are various sources summarizing or highlighting individual elements of each candidate's proposal.

Forbes published an infographic from Wealth Factory based on data from the Tax Policy Center. In addition, Tax Policy Center just published a tax calculator to demonstrate what the candidate's plans might do to your taxes. Tax Foundation's How do Clinton's and Trump's Tax Plans Compare? offers still another compare and contrasts viewpoint. And the Citizens for Tax Justice wrote up their take on each candidates plan separately: The Distributional and Revenue Impact of Donald Trump's Revised Tax Plan and The Distributional and Revenue Impact of Hillary Clinton's Tax Plan. There is also, Associated Press' How the Trump and Clinton tax plans would affect Americans and BBC's Trump v Clinton: Comparing their economic plans. And if you want to stick to sources, by most accounts, thought of as neither left nor right Bloomberg, The Hill, or Reuters might be good places to look.

Most sources at least agree on one point, both candidates are in favor of eliminating the tax loopholes that typically favor the wealthier Americans. For example, the corporate inversion, when American companies move their corporate headquarters overseas to avoid paying US taxes is opposed by both candidates. But the rest of their plans differ widely.

Trump would cut the top income tax bracket by 6.6%; Clinton proposes increasing the tax on wealthier Americans - effectively creating a new top bracket of 43.6%. Clinton would not raise taxes on middle-income taxpayers; Trump would raise the standard deduction to $15,000 for singles and $30,000 for families and proposes eliminating four of the current tax brackets so only the 12%, 25%, and 33% brackets would remain. Trump would cut the corporate tax rate to 15% - less than half the current rate; Clinton proposes leaving the corporate tax rates as is. One of Clinton's top priorities is lowering taxes for working families and one of Trump's is to stimulate the economy through job creation.

This time, neither front-runner is proposing a flat-tax, which means you are still left with the inconvenience of knowing and applying a complicated tax code to make sure you take advantage of as many of the deductions and credits you are eligible for to lower your tax burden. So taxes stay as complex as they have been and likely always will be.

Frankly, the price of fairness regarding taxes in our democracy is our robust and complex tax code full of many forms and many more rules. With that code in place, you have to stay engaged, pay attention to your own situation, and reassess often - at least yearly, or you will pay more taxes or maybe penalties - sometimes even more than you owe.

This year starts with our next president, whoever that may be, taking office. No matter what happens to the tax laws, knowing the rules makes it easier to keep more of your money in your pocket. If you don't have the time or inclination to, or maybe after this election year - it's the patience you are lacking, to learn all the ins and outs of the tax system, then maybe this is the year you hire a TaxPro. Politicians have spin-doctors; you should have the right expert in your corner, especially when it comes to your money.