Taxes, dry as they are, often seem like a tangled web of math, impenetrable. In debates and stump speeches, politicians pay lip service to uncountable pages of tax code, the perfect illustration of an unwieldy government. And, of course, they each propose to fix a highly imperfect tax code, raising and lowering taxes when and on whom they deem fit.
Naturally, voters will factor Hillary Clinton’s and Donald Trump’s tax plans – and how each would affect their own tax bills – into their voting decision come Nov. 8. To help you figure out what the candidates’ plans might mean for your taxes, the nonpartisan (but slightly right-of-center) Tax Foundation released a new calculator comparing what someone would pay in taxes under Trump and Clinton.
Check it out:
If we use a married couple with no children, and whose total income was $55,775 (the median household income for 2015), they’d come out $1,240 ahead under Trump’s plan and see no change in their tax bill under Clinton’s.
But if that same couple had one child under the age of 5, their taxes would go down by $1,353 under Trump and $1,000 under Clinton.
Meanwhile, a couple who brings home a combined $400,000 and spends around $9,000 a year on childcare (with 2 children, one under age 5) will really score with Trump’s plan: they’ll pay $10,378 less in taxes. The same couple will owe $1,500 more under Clinton, who’s raising taxes, but only for high-income returns.
However, it’s important to remember what these calculators do and don’t tell you. This model gives you your personal tax liability given a certain income–what you’ll be paying in taxes–a number that may not represent the actual impact of a tax plan on your personal finances.
For example, paying a little more in taxes may actually save you money in aggregate if the cheaper tax plan hurts the economy and your job prospects in the long run. Similarly, as the Nation pointed out back when the Tax Policy Center released analysis of tax plans during the primary, none of these models show where the money goes. Under these calculators, nothing is said of healthcare, education, infrastructure, or Social Security for instance. As a Tax Policy Center economist told them at the time, “The analysis would be very different if we were the tax and spending center.”
Determining which candidate is better for your finances–not just your 1040–is made even more complex by forecasts. According to a new study by the Wharton School and the Tax Policy Center, Trump’s tax plan would result in growth in the short term, unlike Clinton’s. But by 2036, Trump’s tax cuts for the higher income brackets would have grown the deficit so much that the private sector would be pinched, and total economy depressed.
Clinton’s plan isn’t a whole lot different than President Obama’s, keeping the country down a path of potential unsustainability and pinched economy due to the higher taxes on the wealthy. But according to the modeling from Tax Policy Center and Wharton, it might be better than the alternative. “Trump’s plan lowers taxes a lot, but the long run gain from those improved economic incentives would be more than offset by its very large deficits,” wrote Leonard E. Burman, the Tax Policy Center’s director. “His spending increases would reduce the long run damage modestly, but his overall plan would still do substantial harm to the economy.”
Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumerism, tech, and personal finance. Follow him on Twitter @ewolffmann.
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