1100 13th Street, NW, Suite 750Washington, DC 20005202.887.6400Customer Service: 800.544.0155
All Contents © 2019The Kiplinger Washington Editors
By Rocky Mengle, Tax Editor
| June 25, 2019Updated July 17, 2019
Who will face President Trump in the 2020 election? Right now, 24 Democrats are in the race. We've already seen one candidate—Eric Swalwell—drop out, but his spot in the contest was quickly filled with a new challenger—Tom Steyer. As the battle continues, more candidates will drop out or fade away. However, before that happens, let's take a look at what all 24 of the current Democratic candidates have to say about an important campaign issue: taxes.
The Democratic party is moving to the left, and party voters want to know how each candidate will address income inequality as president. That means pushing progressive ideas on job creation, health care, higher education and other economic issues. Tax policy has to be part of the equation, too. Any broad new social programs will have to be paid for somehow, and that usually means tinkering with the tax code. Some candidates have big, bold tax plans, while others have ideas that are more modest and piecemeal. The voters will ultimately decide which path is best. It'll be months before the first Democratic primary ballot is cast, but it's not too early to start thinking about who will get your vote. When it comes to taxes, here's what all 24 Democratic primary challengers (in alphabetical order) are proposing. Start brushing up now, so you'll know who to vote for when the time comes.
Home State: Colorado
Highest Office: U.S. Senator
As part of his climate change plan, Sen. Michael Bennet is calling for tax incentives to encourage the use of zero-emission vehicles and transit programs. The credits could go to car manufacturers that sell zero-emission vehicles. He is also backing legislation that would create an investment tax credit for business and home use of energy storage technology. This tax break is modeled after the current investment credit for solar energy and would apply either to grid-connected energy storage systems or to residential battery systems.
Sen. Bennet is also behind a plan to overhaul the child tax credit. Currently, you claim the credit on your tax return and the credit amount is subtracted from your tax bill. Also, up to $1,400 of the credit is refundable (that is, you can get a tax refund for up to that amount if the credit is more than what you would otherwise owe). The revised credit under Sen. Bennet's plan would be paid to taxpayers on a monthly basis—$300 per-month ($3,600 per year) for children under six years of age and $250 per-month ($2,000 per year) for children under 17 years of age. So you wouldn't have to wait until April 15 each year to actually benefit from the credit. The credit would also be fully refundable.
The senator has also recently introduced or co-sponsored legislation to expand the earned income tax credit and to exempt AmeriCorps education awards from income tax.
Home State: Delaware
Highest Office: U.S. Vice President
While several Democrats running for president want to adopt a Medicare-for-all health care system, former Vice President Joe Biden would rather keep and improve Obamacare. As part of his plan to do this, he would eliminate the income-based cap on the premium tax credit so that all families who purchase insurance through a health insurance exchange can claim the credit. He would also increase the credit amount by basing it on the cost of a gold-level health plan, rather than a less-expensive silver-level plan. In addition, Biden's health care plan would impose a tax penalty on pharmaceutical companies that increase drug costs by more than the rate of inflation and take away their deduction for advertising expenses.
The former Vice President has also proposed several tax changes to help senior citizens and those who care for them. First, his plan calls for increased tax benefits for elderly Americans who pay for long-term care insurance with their retirement savings. As president, Biden will also allow low-wage workers over 65 years of age to claim the earned income tax credit (currently, you can't claim the credit if you're over 65). To help protect Social Security, he would make all income subject to the Social Security payroll tax. (Wages above $132,900 are currently not subject to the payroll tax.) In addition, he would create a $5,000 tax credit for "informal" caregivers—family members or other loved ones—providing long-term care to the elderly. Caregivers would also be allowed to make "catch-up" contributions to retirement accounts.
Vice President Biden has issued a climate change plan that includes some tax provisions, too. His "Clean Energy Revolution" would be paid for by "reversing the excesses of the Trump tax cuts for corporations, reducing incentives for tax havens, evasion, and outsourcing, ensuring corporations pay their fair share, closing other loopholes in our tax code that reward work not wealth, and ending subsidies for fossil fuels." More specifically, his plan calls for restoring the full electric vehicle tax credit (while aiming it at middle-class consumers) and increasing tax incentives for carbon capture, use and storage. (The plan doesn't specifically mention a carbon tax, though.)
Other tax proposals coming out of the Biden camp include:
Home State: New Jersey
Sen. Cory Booker's newest tax plan is to create a refundable credit for renters. The credit would be equal to the amount of rent exceeding 30% of an eligible taxpayer's income, but only up to the neighborhood's fair market rent as determined by the U.S. Department of Housing and Urban Development. The estimated median credit amount would be $4,800. The proposal is part of a much larger plan to address the lack of affordable housing, and it would be paid for by restoring the federal estate tax to 2009 levels and eliminating unspecified tax breaks for investments held until death.
As with other candidates on the Democratic side, Sen Booker wants to increase and expand the earned income tax credit (EITC), too. He calls his initiative the "Rise Credit." Under his plan, couples with income up to $90,000 would qualify for the EITC (currently phased-out for couples with income above $55,952), the maximum credit would go up to $8,000 (from $6,557 for 2019), and childless taxpayers could see their credits rise from a maximum of $529 for 2019 to about $4,000.
The senator is also behind a bill in Congress that would toughen Opportunity Zone (OZ) Program reporting requirements so that lawmakers can more easily tell whether the program is actually helping distressed neighborhoods. The OZ Program, which was created by the 2017 tax reform law, lets taxpayers defer capital gains from the sale of property by investing the proceeds in opportunity funds, which help low-income communities. The OZ legislation Sen. Booker favors would require the government to collect data on the number of opportunity funds created and the impact the funds have on underserved communities. The data would be handed over to Congress each year.
Home State: Montana
Highest Office: Governor of Montana
As far as federal taxes go, Gov. Steve Bullock has taken shots at the Tax Cuts and Jobs Act—as all the Democratic candidates have done—saying it benefits the wealthy, not working-class families. As president, he would tweak the personal and corporate income tax rates to counter the effects of the tax reform law, but not raise rates to their previous levels. He would increase the top personal rate a few percentage points (although he hasn't said exactly how high it should be) and raise the corporate rate from 21% to 28%.
Back in Montana, the governor claims to be a progressive who "gets things done." For example, he recently signed state legislation creating an earned income tax credit, allowing schools to impose taxes to pay for new safety measures (such as active shooter training) and raising the lodging tax. However, he was unable to get liquor and rental car tax increases through the state legislature.
Retirees will also be interested to know that Gov. Bullock recently vetoed a bill to increase Montana's income tax exemption for Social Security benefits. He said it would have disproportionately benefited high-income seniors.
Home State: Indiana
Highest Office: Mayor of South Bend, Ind.
Mayor Pete Buttigieg has also criticized the 2017 tax reform bill signed by President Trump, saying it just provided tax cuts for the wealthy—again, nothing new when it comes to the 2020 Democratic presidential candidates.
However, the mayor has hinted at a few tax increases that he would consider as president, including:
He has also called for a "more equitable use of the estate tax," which could possibly mean lowering the exemption amount back down to pre-2010 levels.
Home State: Texas
Highest Office: U.S. Secretary of Housing & Urban Development
Julian Castro, former Secretary of the U.S. Department of Housing and Urban Development, has publicly stated that the top marginal income tax rate—currently set at 37%—should be raised. He has not, however, said how high the rate should go. Money generated from additional taxes on the wealthy and on corporations could be used to pay for universal health care if Castro is elected president. (When he was the mayor of San Antonio, Castro pushed through a sales tax increase to pay for a pre-K school program.)
To improve the nation's schools and education programs, Secretary Castro has proposed:
Home State: New York
Highest Office: Mayor of New York City
Like other candidates in the race, New York City Mayor Bill de Blasio talks about taxing the wealthy at higher rates. In fact, he recently tried (unsuccessfully) to raise New York City's top income tax rate from 3.876% to 4.41% for couples with taxable income of more than $1 million and singles with taxable income over $500,000. He also supported the recent increase in the city's "mansion tax," which is imposed on home sales over $1 million.
Mayor de Blasio has worked to provide tax relief for ordinary New Yorkers, too. For instance, he supported plans to expand property tax exemptions for seniors and disabled persons, provide property tax relief to homeowners affected by Hurricane Sandy and allow residents to use pretax dollars to pay for commuting expenses.
When it comes to federal taxes, the mayor has been an outspoken critic of the Tax Cuts and Jobs Act since before the legislation was passed. Like other Democrats in the race, he believes the 2017 tax reform legislation is tilted in favor of corporations and the richest Americans.
Home State: Maryland
Highest Office: U.S. Representative
As the first Democrat to join the race, former Rep. John Delaney has had plenty of time to work on his policy proposals … and he has quite a few ideas on taxes. He's in favor of increasing the top marginal income tax rate—but not all the way up to 70%, as has been suggested by some Democrats. He would roll back tax breaks for wealthy Americans enacted as part of the 2017 tax reform law, too. Doubling the earned income tax credit and expanding eligibility for adults without children are also on his list.
To pay for improvements to the nation's infrastructure, Rep. Delaney wants to increase the corporate tax rate from 21% to 27% and adjust the federal gas tax annually to account for inflation. His climate change plan calls for a carbon tax and having the revenue returned to the American people. (You could also invest your share of the tax revenue in an IRA, 529 plan or some other tax-advantaged savings account.) He also supports enhanced renewable energy tax credits to spur private sector investment in renewable energy.
Rep. Delaney is also calling for:
Home State: Hawaii
As a presidential candidate, Rep. Tulsi Gabbard hasn't talked all that much about taxes. She has repeated the standard Democratic line about the 2017 tax reform law overwhelmingly benefiting wealthier Americans, and she generally supports more taxes to pay for new social programs, but tax policy certainly doesn't seem to be at the center of her campaign.
Nevertheless, as a member of Congress, Rep. Gabbard has supported tax incentives that encourage or reward:
Within her first 100 days as president, Sen. Kirsten Gillibrand wants to enact a "Family Bill of Rights." Under the plan, parents and children would have new rights to prenatal care, adoption, paid family leave, health care, preschool and other services to "ease the financial burden on families." To pay for the additional services, the senator is proposing a new 0.1% tax on stock sales and other financial transactions. Her plan also calls for (1) a refundable adoption tax credit and (2) an expanded child and dependent care credit of up to $6,000 that is refundable and available to more families.
Sen. Gillibrand is also pushing a public campaign financing plan that would allow voters to receive "democracy dollars" (vouchers) to assign to their favorite candidates in federal elections. The vouchers would be paid for by eliminating tax code provisions that allow some large corporations to deduct the salaries of their top executives. Sen. Gillibrand doesn't say if you'd have to pay tax on the democracy dollars you receive from the government—presumably not.
Along with unwinding the 2017 tax reform law's tax breaks for the wealthy and $10,000 cap on the state and local tax deduction, Sen. Gillibrand also wants to:
Home State: California
Former Sen. Mike Gravel isn't really in the race to win it. He just wants to "push the field toward sane views on American imperialism and the need for fundamental political reform, and then endorse the most progressive candidate." Nevertheless, he does have a long list of progressive tax reform ideas that he supports, including:
Like the other Democratic candidates, Sen. Kamala Harris (D-Calif.) is no fan of the Tax Cuts and Jobs Act. "Get rid of the whole thing," she recently said. However, Sen. Harris is also pushing a few other tax proposals that go beyond just repealing President Trump's signature tax act, and they aren't quite as left-leaning as plans put forth by some of the other candidates. Instead of soaking the rich, her tax initiatives tend to provide tax breaks for middle- and lower-income taxpayers.
Her most noteworthy plan is to give tax credits of up to $6,000 per year to families earning less than $100,000 annually (up to $3,000 per year for single filers earning less than $50,000). Plus, the credit could be paid in advance—up to $500 per month for families, or $250 per month for singles.
She has also proposed creating a new tax credit for Americans who spend more than 30% of their earnings on rent and make less than $100,000 per year ($125,000 in high-cost areas). This credit would also be paid on a monthly basis to put money in renters' hands when the rent check is due.
Sen. Harris also wants to hit pharmaceutical companies with a new 100% tax on profits made from "abusive" drug prices. She would also take away the drug companies' deduction for advertising expenses.
Finally, in a nod to her fellow Californians, Sen. Harris is also backing legislation to exempt state earthquake mitigation assistance from federal tax.
Highest Office: Governor of Colorado
Like most of his fellow Democrats, former Gov. John Hickenlooper would push for higher taxes on wealthy Americans and lower taxes on working families. For instance, he's open to raising the top individual income tax rate—which is currently set at 37%—but he has not said how high the top rate should go. (As one of the more moderate candidates in the race, he probably wouldn't back rates as high as other candidates have suggested.) He also supports expanding the earned income tax credit by doubling the credit for households with children, raising the maximum benefit for families that don't have children living at home, reducing the minimum qualifying age for taxpayers without children in their home from 25 to 21 and increasing the credit's income limit.
Gov. Hickenlooper also wants to change the way capital gains are taxed. For instance, he supports treating dividends and long-term capital gains as ordinary income (with exceptions for long-term capital gains linked to small businesses, primary residences and retirement accounts), including gains realized when the asset owner dies. He also wants to adjust taxable long-term gains to account for inflation over the period that an asset is held.
The former governor of Colorado is also pushing a few tax breaks designed to help rural communities. First, there's a new "mom and pop" tax credit for the owners of businesses with five or fewer full-time employees and annual revenues of less than $10 million. These owners would be allowed up to $50,000 in lifetime credits for new business investments or employment. Second, the governor is calling for a new Entrepreneurial Opportunity Zone Program, which would provide tax deductions for both new businesses and workers at new businesses in rural and distressed areas. The deductions would be available for five years. Finally, his plan to help rural America includes increased funding for the federal historic tax credit to boost investment in the renovation of historic buildings.
Home State: Washington
Highest Office: Governor of Washington
Washington Gov. Jay Inslee's presidential campaign is pretty much focused on one issue: Climate change. So it's no surprise that all of his tax plans revolve around that issue. For example, Gov. Inslee supports tax incentives for:
He also want to repeal tax breaks for private jets, which he sees as a "giveaway to the wealthy that promotes unnecessary climate pollution from luxury travel."
It's somewhat surprising, though, that Gov. Inslee has not proposed a carbon tax so far in his presidential campaign. He pushed hard for a state carbon tax in Washington, but voters shot down a ballot initiative last November that would have imposed such a tax. (Maybe the governor learned a political lesson from that defeat?)
Home State: Minnesota
One policy area where Sen. Amy Klobuchar has several tax ideas is infrastructure improvement. Her plan to rebuild America's roads and bridges and upgrade other critical infrastructure systems would be paid for in part by raising the corporate income tax rate from 21% to 25%, eliminating tax breaks that encourage U.S. businesses to move overseas and increasing tax enforcement efforts. New tax credits to attract capital investment to public infrastructure and expanding clean energy tax incentives are also part of the plan.
Sen. Klobuchar is also behind efforts to boost retirement savings for working-class families by requiring minimum employer contributions to employee retirement accounts. Employers would receive a tax credit for 50% of their minimum contributions to their first 15 workers, and 25% of their minimum contributions to their next 15 workers. However, to pay for the tax credits, the plan calls for increasing the corporate income tax rate from 21% to 23% (a smaller increase than her infrastructure plan calls for) and bumping the top personal income tax rate from 37% back up to 39.6%, which was the top rate before the Tax Cuts and Jobs Act.
Other tax changes that Sen. Klobuchar supports include:
Home State: Florida
Highest Office: Mayor of Miramar, Fla.
Like all the other Democrats running for president, Mayor Wayne Messam rails against President Trump's 2017 tax reform law. The condemnation is familiar—the Tax Cuts and Jobs Act, he says, disproportionately benefits big business and millionaires.
Beyond bashing the TCJA, Mayor Messam's overall plan to wipe out student loan debt has some tax proposals in it. First, any canceled student loan debt would not be taxable income under the plan. Second, Mayor Messam has called for a new payroll tax on employers to help offset the cost of higher education.
Mayor Messam also supports the legalization and taxation of marijuana.
Home State: Massachusetts
Rep. Seth Moulton wants to raise revenue for progressive causes, but he doesn't support "wealth taxes" or other soak-the-rich plans put forth by some other Democrats. Instead, he would prefer to see the corporate income tax rate increased to 25% and the capital gains tax on investments go up. He also supports comprehensive tax reform that would benefit families, students and small business owners.
Other tax proposals that Rep. Moulton backs include:
Like most of the other candidates, former Congressman Beto O'Rourke wants to "roll back the worst elements of the Trump tax cuts." For example, he would raise the top personal income tax rate from 37% to 39% and increase the corporate income tax rate from 21% to 28%.
Rep. O'Rourke also has some tax-related ideas concerning campaign finance and higher education. To get big money out of politics, he wants to make up to $500 in low-dollar campaign contributions tax deductible. And he wants to use the proposed increase in the corporate income tax rate to help pay for two free years of college for everyone.
For future wars, Rep. O'Rourke has proposed a new "war tax" to pay for improved health care for veterans. Only households without current members or veterans of the U.S. Armed Forces would have to pay the progressive tax, which would range from $25 for taxpayers with an adjusted gross income (AGI) less than $30,000 to $1,000 for taxpayers with an AGI greater than $200,000.
Other tax changes Rep. O'Rourke would pursue as president include:
Home State: Ohio
Rep. Tim Ryan is another Democratic challenger who hasn't said much or given specifics about tax policy while on the campaign trail. He's on the record for supporting higher taxes for people with income over $10 million, but he hasn't told us what he thinks the tax rates ought to look like for those taxpayers.
In the past, Rep. Ryan has called for expansion of the earned income tax credit and the child tax credit (common proposals for Democrats), as well as lower corporate tax rates in exchange for higher taxes on capital gains and dividends, which is a somewhat unique proposal for a Democrat (at least the part about lowering the corporate rate).
As a member of Congress, Rep. Ryan has introduced or sponsored tax-related bills that might provide clues as to what tax changes he would push for if elected president. For instance, he has recently backed legislation to:
These proposals will likely appeal to middle-class voters.
Home State: Vermont
As president, Sen. Bernie Sanders would push an ambitious progressive agenda that includes health care for all, jobs for all and college for all. So how would he pay for it all? Largely by taking away tax breaks or adding new taxes for corporations and the wealthy. However, taxes would go up for middle-class families as well under his Medicare-for-all plan.
One idea to tax the rich that Sen. Sanders has touted as a candidate is his plan to create a higher, progressive estate tax. For 2019, only estates worth more than $11.4 million are subject to the federal estate tax, which is imposed at a 40% rate. Under Sanders's plan, estates valued from $3.5 million to $10 million would be taxed at a 45% rate; estates valued from $10 million to $50 million, at a 50% rate; estates valued from $50 million to $1 billion, at a 55% rate; and estates valued at more than $1 billion, at a 77% rate.
In addition, Sen. Sanders wants a new financial-transactions tax on stock, bond and derivative trades. The tax rates would be 0.5% for stock trades, 0.1% for bond trades and 0.005% for derivative trades. He wants to eliminate the payroll tax exemption for wages above $250,000, too. Currently, wages above $132,900 are not subject to payroll taxes. (Under Sanders's plan, wages between $132,900 and $250,000 would still not be taxed.)
Rounding out his tax plans, Sen. Sanders is also calling for:
Highest Office: None
Billionaire Tom Steyer is the latest Democratic candidate to throw his hat into the ring. So far, he hasn't proposed any specific new tax law changes. He has expressed a desire for "simpler" and "fairer" tax laws, taxing the wealthy, and closing "tax loopholes," but he hasn't provided any details yet.
He does have a history of throwing his money behind progressive causes, including efforts to:
That should give voters some idea where Steyer stands on tax issues.
Out of all the Democrats running for president, Sen. Elizabeth Warren has arguably had the most to say about taxes as a candidate. It started back in January, when she proposed the Ultra-Millionaire Tax (also known as the "wealth tax"). The annual tax would be equal to 2% on net worth above $50 million and 3% on net worth above $1 billion. A taxpayer's "net worth" would consist of all assets worldwide, including residences, businesses, trusts, retirement funds and personal property worth $50,000 or more. Assets held by minor children would be counted, too. Other aspects of the plan include:
Sen. Warren is pushing a similar proposal for corporate income taxes—the Real Corporate Profits Tax. Under her plan, there would be a 7% tax on all corporate profits reported to investors above $100 million. There would also be no exemptions or deductions for the new tax.
In 2019, Sen. Warren has also introduced or co-sponsored legislation in the U.S. Senate that would:
She also introduced a housing bill last year that would be funded by moving the estate tax thresholds back to their 2009 levels and establishing more progressive estate tax rates.
Author and motivational speaker Marianne Williamson is a newcomer to politics. On taxes, she has called for the repeal of the 2017 tax reform law—except for the provisions providing middle-class tax cuts—and eliminating corporate tax breaks. Williamson also supports additional taxes on the richest Americans. As president, she would impose an additional 3% tax on billionaires and 2% on those with income over $500 million.
To shore up Social Security, Williamson is in favor of raising the cap on income subject to the Social Security payroll tax.
Williamson also supports raising the estate tax. However, to avoid the closure of small businesses, she would put measures in place to help families of small-business owners who die to pay-off the estate tax bill over time.
Like several other candidates, Williamson also wants Wall Street fund managers to pay more tax on "carried interest." She is also open to a carbon tax.
If elected president, entrepreneur Andrew Yang's first priority will be the creation of a universal basic income system that will pay every American adult $1,000 a month. But how's he going to pay for it? For the most part, with a new 10% value added tax (VAT).
Basically, a VAT is a consumption tax that is levied on businesses at each stage of the production process (including final sale) and based on the value added to a product during that stage. (Like other taxes imposed on businesses, VATs are often passed on to consumers in the form of higher prices.) The value added is measured by the difference between the business's sales and costs. For example, Company A creates a widget from scratch (with no costs for supplies) and sells it to Company B for $10. Company B uses the widget as a component part in a thingamabob it sells to Company C for $30. Company C sells the thingamabob to you for $45. Company A is taxed on the $10 of value it added ($10 - $0) to the final product, Company B is taxed on the $20 of value it added ($30 - $10) and Company C is taxed on the $15 of value it added ($45 - $30). Although Americans generally aren't familiar with VATs, they're widely used in other countries around the world.
Yang has a few other tax ideas, too. For instance, he wants to end favorable tax treatment for capital gains and carried interest. He is also proposing a 0.1% tax on financial transactions. If you don't like filling out tax forms, you could be in luck: Yang would let you opt into an IRS program to have your taxes filed automatically. Finally, to "make paying taxes patriotic and fun," he thinks everyone should be able to direct 1% of their taxes to a specific government project of their choice.