How your taxes change under Trump or Clinton

Published Thu, Sep 8 20162:18 PM EDT

Credit Suisse compared side by side the tax implications for individuals and companies of a potential victory by Republican candidate Donald Trump or Democratic candidate Hillary Clinton . The investment bank believes a key focus for investors and the general public should be centered on taxation since both candidates' policies differ significantly. (The standard deduction is for married couples filing jointly.) In his analysis, James Sweeney, chief economist and co-head of global economics at Credit Suisse, outlines the stark difference between the two presidential nominees, with Clinton increasing income tax and the levy on income from dividends and interest by 4 percentage points from the current levels. Meanwhile, taxes on capital gains are expected to jump by nearly 20 percentage points from the current levels to 43 percent, as shown on the table above. By comparison, Trump claims he would lower taxes across the board, with income tax falling by nearly 7 percentage points and taxes on dividends and capital gains decreasing by about 4 percentage points from the current levels. Similarly, the levy on interest income is expected to drop by 10 percentage points to 33 percent, according to data compiled by Credit Suisse. Under Clinton, the corporate tax rate would remain unchanged at 35 percent, while Trump proposes to lower that tax to 15 percent. Apart from taxation, below are the key economic expectations from each candidate's agenda, paraphrased from the firm's report. Under Clinton we expect: 1. Serious difficulties passing bills through a Republican House. 2. Obama-style reliance on executive rulings. 3. Intact Dodd-Frank and Affordable Care Act; vigorous enforcement of environmental protection rules. 4. An attempt at passing a $275bn infrastructure bill, which, if it passes, will not materially change the growth outlook. 5. Increasingly assertive foreign policy. 6. Support for amended trade deals, including TPP [ Trans-Pacific Partnership ]. 7. A filling of Fed vacancies, tilting the balance of the FOMC [Federal Open Market Committee] to Washington-based governors. Under Trump we expect: 1. Higher potential for major legislative changes. 2. Stricter immigration policy, wall building, deportations. 3. Fiscal ease mainly through tax reductions, but spending increases too. 4. A scaled up war on ISIS, but less activist foreign policy generally. 5. Reduced regulations in some industries. 6. Opposition to trade deals and attacks on U.S. firms that "export jobs." 7. Janet Yellen will be replaced and the Fed will be blamed for negative economic shocks. To be sure, Credit Suisse believes the possibility of Trump winning the election is extremely unlikely. "In our view, if the election were held today, the probability of a Clinton victory would be above 90 percent," wrote Sweeney.

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Credit Suisse compared side by side the tax implications for individuals and companies of a potential victory by Republican candidate Donald Trump or Democratic candidate Hillary Clinton.

The investment bank believes a key focus for investors and the general public should be centered on taxation since both candidates' policies differ significantly.