Review the candidates’ tax proposals:

Ordinary Income

Clinton: Adds a 4% surtax on income over $5 million

Sanders: Establishes four new brackets of 37%, 43%, 48%, and 52%. The top rate applies to taxable income over $10 million. Raises the rate of all other brackets by 2.2%.

Cruz: Establishes a flat rate of 10% on all ordinary income. Increases the standard deduction to $10,000 per filer.

Trump: Establishes four tax brackets, with rates of 0%, 10%, 20% and 25%. The top rate applies to income over $150,000 for single filers and $300,000 for joint filers.

Capital Gains and Dividends

Clinton: Adds a 4% surtax on income over $5 million. Raises rates on medium-term capital gains (investments held for less than six years) to between 24% and 39.6%.

Sanders: Taxes capital gains and dividends at ordinary income rates for households with incomes over $250,000.

Cruz: Lowers the rate on capital gains and dividends income to 10%.

Trump: Eliminates the net investment income surtax (applies to high incomes)

1. Which tax plan(s) is/are proportional taxes?

2. Which plans are the most progressive?

4. Which plans have the same tax rate on income and capital gains?

5. Discuss what principles underlie each plan?