During her presidential campaign, Hillary Clinton has made many claims about economic issues. CNN’s Reality Check Team put her statements and assertions to the test.
The team of reporters, researchers and editors across CNN listened throughout the speech and selected key statements, rating them true; mostly true; true, but misleading; false; or it’s complicated.
Reality Check: Clinton on Trump’s estate tax plan
August 11, 2016
By Kate Grise & Tami Luhby
In her economic policy speech, Hillary Clinton painted Donald Trump’s tax plans as a gift to him and his wealthy friends.
She made note that he would be a big beneficiary of his plan to eliminate the estate tax.
“If you believe that he’s as wealthy as he says, that alone would save the Trump family $4 billion. But it would do nothing for 99.8% of Americans,” she said in Warren, Michigan Thursday.
Very few people who die are subject to estate taxes. Americans who pass away in 2016 can bequeath $5.45 million to heirs free of the federal estate tax. Married couples can give $10.9 million tax free. Anything over that is subject to tax. The top rate is 40%.
Donald Trump says that he is worth $10 billion. We’ll go with his numbers, though it is worth pointing out that other estimates put Trump’s net worth around $4.5 billion. Trump falls into the top tax bracket and would owe 40% on his assets above the $5.45 million lifetime exemption, which leaves his estate with a $3.997 billion tax liability.
However, there are many loopholes and deductions that Trump’s team of lawyers could help him navigate. The Tax Policy Center estimated in 2013 that for all taxable estates worth more than $20 million, they are paying an average 18.8% rate. For Trump’s family, this would bring their tax liability down to about $1.8 billion.
As for the rest of America: Of the 2.6 million Americans who died in 2015, only about 5,000 estates paid the federal estate tax, according to the non-partisan Tax Policy Center. That’s only 0.2% of the Americans who died last year.
So it’s TRUE that 99.8% of Americans would not benefit from the elimination of the estate tax. It is also TRUE that Trump’s family could owe just less than $4 billion in estate taxes if the family does not use any loopholes or exemptions.
Reality Check: Clinton on Trump Loophole
August 11, 2016
By Jeanne Sahadi, CNNMoney
In contrasting her economic vision with Donald Trump’s on Thursday, Hillary Clinton slammed what she termed the “Trump Loophole.”
“It would allow him to pay less than half the current tax rate on income from many of his companies. He’d pay a lower rate than millions of middle class families,” Clinton said during her speech in Warren, Michigan.
Here’s what she is referring to: Under his tax reform proposal, Trump would slash the income tax rate on all business income to 15%. That includes business entities such as limited partnerships (LPs), limited liability corporations (LLCs) and S Corps.
They’re known as pass-throughs entities, because the entity itself isn’t subject to income tax. Instead, its profits are passed along to its shareholders and partners, who then report them on their individual tax returns.
Today, those profits are taxed at a top rate of 39.6%. Under Trump’s proposal, they would be taxed at just 15%.
Related: Hillary Clinton slams “Trump Loophole”
Trump’s financial disclosure documents – which list all of his assets and businesses interests – are chock-full of LLCs and LPs.
Therefore, we rate Clinton’s claim as TRUE.
Reality Check: Clinton on undocumented workers paying Social Security
August 11, 2016
By Kate Grise, CNN
During a speech on the economy, Hillary Clinton laid out parts of her immigration reform plan and said that moving toward reform would help all Americans and the economy.
“We already have millions of people working in the economy and paying $12 billion a year to Social Security even though they are undocumented,” she said.
The Clinton camp told Politifact that she was referring to a 2013 actuarial note from the Social Security Administration.
According to the report, the $12 billion figure included contributions from both undocumented workers and their employers into Social Security.
The Office of the Chief Actuary estimates that there were 3.1 million undocumented immigrants who worked and paid Social Security taxes in 2010. It estimated that a worker earned about $34,000 a year and that both employee and employer paid a 6.2% tax rate, which resulted in a $13 billion contribution to Social Security. These workers may have had a work permit and overstayed their visa, used fake birth certificates to get a Social Security number or used a Social Security number that did not actually belong to them.
The report said that some of those workers could have drawn benefits totaling an estimated $1 billion, which leaves us with $12 billion in the Social Security fund.
The Heritage Foundation, a conservative think-tank, estimates that the total paid into the Social Security trust by undocumented workers is closer to $7 billion but does not include contributions from the employer.
Both of these figures are, of course, rough estimates. Each report had to narrow down the population of non-permanent residents or citizens to come up with the number of undocumented workers who were actually paying into Social Security.
We rate Clinton’s claim as MOSTLY TRUE because at the end of the day, these figures are estimates based on the best numbers we have to go off of, but they are not exact figures. Also, the figure is from 2010 and is likely to have changed in the last six years.
Reality Check: On Social Security Cap, Clinton claims she and Sanders agree
April 14, 2016
By Kate Grise, CNN
During one of their many sparring matches during the debate, Clinton tried to convince her opponent that they had more in common than not on the issue of Social Security. Regarding raising the payroll income cap, Clinton said that she and Sanders actually share the same view.
“I have supported it. We are in vigorous agreement here, senator,” Clinton said.
Sanders didn’t appear convinced about his opponent’s commitment to protect the Social Security trust fund by asking wealthier Americans to pay more.
“If I hear you correctly, Madam Secretary, you are now coming out finally in favor of lifting the cap on taxable income and extending and expanding social security,” Sanders said. “If that is the case, welcome on board. I’m glad you’re here.”
During her campaign, Clinton has been warming to the idea of raising the cap on income that can be taxed for Social Security.
Under current law, workers do not pay Social Security taxes on anything they earn above $118,500.
According to Clinton’s website, she aims to defend Social Security and “understands that there is no way to accomplish that goal without asking the highest-income Americans to pay more, including options to tax some of their income above the current Social Security cap, and taxing some of their income not currently taken into account by the Social Security system.”
Clinton, in campaign appearances, has also said she is committed to extending the life of the Social Security trust fund. She has pointed to taxing incomes at higher levels and applying Social Security taxes to passive income as ways of doing so, but, unlike Senator Sanders, she has stopped short of proposing any specific plans to ensure the longevity of Social Security.
And these comments are a shift from her position in 2008 on lifting the cap. During her first run for the White House, Clinton spoke out against the idea. “I’m certainly against one of Senator Obama’s ideas, which is to lift the cap on the payroll tax,” Clinton said during a Democratic primary debate in 2008.
We rate her claim as TRUE, but given her lack of specific proposals, it’s understandable Sanders is skeptical of his opponent’s long-standing commitment on the issue.
