How Hillary Clinton wants to make rich pay their ‘fair share’

Hillary Clinton proposed Monday a 4 percent tax increase on people who earn more than $5 million a year, pledging in Waterloo, Iowa, to “get the wealthy and the corporations to pay more of their fair share” in taxes.

With Clinton having already pledged that she will not raise taxes on “middle-class families”, she has proposed the new surcharge as “a direct way to guarantee that effective tax rates rise for the taxpayers most likely to avoid paying their fair share through tax gimmicks and exploiting loopholes”. As part of her plan, Clinton would shut down the so-called “private tax system” by closing egregious loopholes that let multi-millionaires and billionaires avoid paying their fair share of US taxes and restore basic fairness to the taxation of multi-million dollar estates.

Ms Clinton, a former secretary of state and the Democratic presidential front-runner, unveiled her plan for the “fair share surcharge” at an event in Iowa, the state that on February 1 votes first in the USA nominations race. Buffett has criticized tax policies that allow the rich to pay lower rates than the middle class and under the proposed measure, a minimum tax rate of 30 percent would be imposed on individuals making $1 million or more annually.

Presumably under Clinton’s proposals the 28% average effective rate for the $1 million-plus crowd would rise.

This proposal – along with the Buffett Rule – is not all of Clinton’s tax plan, according to aides, who said the Democratic front-runner will continue to roll out more tax proposals this week.

Of the current 12 Republican presidential candidates, several have called for reducing the tax rates for all Americans. The campaign estimates the surcharge would hit 0.02% of filers. And the top tax rate imposed on taxable estates is 40%. The plan’s details follow Clinton’s announcement yesterday of a new four-percent surcharge on those who make more than $5 million per year.

Close key tax shelter “loopholes:” Clinton would close down various legal tax strategies that very high-income investors can use to shelter millions and in some cases billions of dollars from US taxes offshore or in tax-preferred accounts such as IRAs.

Clinton proposes taxing carried interest as regular income.