By Heath Waddington, Senior Vice President, Sales & Marketing
Given that this is an election year, Ann Arbor Annuity Exchange felt it would be a good idea to summarize the major candidates’ positions on some key topics impacting financial professionals. The candidate position information presented below was taken from a summary compiled by InsuranceNewsNet.com, unless otherwise noted.
Subject: Raising Federal Income Taxes
As you may have assumed, candidate positions are divided by familiar party lines, with all four Republicans supporting tax reductions while both Democrats support tax increases on the wealthy.
Hillary Clinton – Adds a 4% surtax on income over $5 million.
Bernie Sanders – Establishes four new brackets of 37%, 43%, 48%, and 52%.
Donald Trump – Calls for a “simplified” tax code with four brackets: 0%, 10%, 20%, and 25%.
Ted Cruz – Establishes a flat rate of 10% on income. “When it comes to jobs and growth and opportunity, the two most effective levers that the federal government has to facilitate small businesses creating new jobs, are tax reform and regulatory reform,” Cruz said adding, “I am campaigning on a flat tax that would allow every American to fill out his or her taxes on a post card that allows us to abolish the IRS.”, 
John Kasich – Reduces the number of tax brackets to three from seven; lowering the top individual tax rate from 39.6% to 28%.
Marco Rubio – Proposes three tax rates: 15%, 25%, and 35%.
Subject: Estate Taxes
Once again, the candidates very predictably fell right along party lines when it came to their stance on estate taxes, with all four Republicans supporting a complete elimination, while both Democrats would seek to increase the estate tax while simultaneously lowering the exclusion.
Hillary Clinton – Increases the top estate tax rate to 45%, and lowers the estate tax exclusion to $3.5 million.
Bernie Sanders – Increases the top estate tax rate to 65%, and lowers the estate tax exclusion to $3.5 million. The way it would work, according to Ashlea Ebeling of Forbes, is that “Under Sen. Sanders’ legislation, the tax rate would be 45% for estates valued between $3.5 million and $10 million. The rate on estates worth more than $10 million and below $50 million would be 50%, and the rate on estates worth more than $50 million would be 55%. An additional surtax of another 10% – for a 65% rate – would be assessed on billionaires.”
Donald Trump – Eliminates the estate tax.
Ted Cruz – Eliminates the estate tax.
John Kasich – Eliminates the estate tax. “If you are a person that thinks you ought to pound the rich into submission, I guess you won’t like the plan,” said Kasich.
Marco Rubio – Eliminates the estate tax.
Subject: Social Security
Once one of the most hotly debated subjects, Social Security benefits seems to have taken a backseat to other issues this election, but it is still extremely relevant to the financial services industry. While the Democrats look to raise taxes to pay for the forecasted shortfall, Rubio and Cruz look to delay benefits. The likely solution is a combination of both.
Hillary Clinton – Would expand Social Security benefits by increasing taxes on the wealthiest Americans by raising the cap on Social Security taxable income and taxing other income not currently taken into account.
Bernie Sanders – Would boost Social Security funding by raising the system’s taxable wage base to $250,000.
Donald Trump – Opposes cuts to Social Security benefits and raising the retirement age but has not presented a detailed proposal.
Ted Cruz – Wants to raise the Social Security retirement age and cap cost-of-living increases. He advocates allowing workers to save up to $25,000 per year in universal savings accounts (USAs).
John Kasich – Supported a bill to reduce the percentage of Social Security benefits that is taxable from 85 to 50% for single taxpayers with incomes over $25,000 and married couples with incomes over $32,000. Proposed establishing personal retirement savings accounts.
Marco Rubio – Has proposed that the federal government’s Thrift Savings Plan be opened up to nongovernment workers. Would increase the Social Security retirement age and reduce the rate of benefit growth for upper-income seniors. “With the average American working longer than when Social Security was first conceived, it’ll take some changes to keep Social Security solvent and responsive to Americans’ needs,” said Rubio.
Given the propensity of Republicans to support smaller government, it stands to reason that all four Republican candidates have called for a repeal of Dodd-Frank. Given that this legislation was proposed and passed by a Democratic-controlled Congress, it also makes sense that both Democrats support it.
Hillary Clinton – Supports law.
Bernie Sanders – Supports law.
Donald Trump – Supports repeal. “Well Dodd-Frank is probably not a very good thing. There are aspects of it you could leave. But generally speaking Dodd-Frank stifles business. It just totally stifles business,” said Trump.
John Kasich – Supports repeal.
Ted Cruz – Supports repeal.
Marco Rubio – Supports repeal.
Subject: Fiduciary Rule
Possibly the hottest topic in the industry right now is the Department of Labor’s (DOL’s) fiduciary rule. We have dedicated several stories to the controversial rule in this magazine recently, and thought it would be a good idea to let you know where everyone stands. Unfortunately, none of the Republicans have taken a public position on the rule. Sanders has made comments in support of the rule, while Clinton has also expressed her support of the rule on her website. According to a factsheet found on her website, “Clinton would fight to protect honest and hardworking Americans from unfair and deceptive practices in the financial industry that are holding them back – and she will lay out specific proposals for doing so over the course of this campaign.” Those proposals look to be in support of the proposed DOL rule.
While these are just a handful of the important topics that voters will consider in judging the candidates in the coming months, these seem to be the topics that will most likely have the biggest effect on the financial services industry. Life insurance and fixed annuity sales could be impacted considerably depending on the path forward with any of the above topics. If you have any questions about life insurance or fixed annuities, please feel free to call 800.321.3924 and ask to speak to a marketer.
Heath Waddington | Senior Vice President, Sales & Marketing
Ann Arbor Annuity Exchange
Ph: 800.321.3924 x140 | Dir: 734.786.6140
 Drucker, David M. “Ted Cruz gets specific on ‘abolishing the IRS’” The Washington Examiner. 27 Apr 2015. Web. Accessed on 22 Feb 2016 at http://www.washingtonexaminer.com/ted-cruz-gets-specific-on-abolishing-the-irs/article/2563631
 Cohen, Patricia. “Republican Presidential Candidates Rally Around Flat Tax” NY Times. 15 May 2015. Web. Accessed on 9 Mar 2016 at http://www.nytimes.com/2015/05/16/business/economy/republican-presidential-candidates-rally-around-flat-tax.html?_r=0
 Ebeling, Ashlea. “Bernie Sanders Calls For 65% Top Estate Tax Rate” Forbes. 25 Jun 2015. Web. Accessed on 22 Feb 2016 at http://www.forbes.com/sites/ashleaebeling/2015/06/25/bernie-sanders-calls-for-65-top-estate-tax-rate/#752e2b2d41f1
 Sherfinski, David. “John Kasich pledges to balance the federal budget in eight years as president” Washington Times. 15 Oct 2015. Web. Accessed on 17 Feb 2016 at http://m.washingtontimes.com/news/2015/oct/15/john-kasich-pledges-balance-federal-budget-eight-y/
 Rubio, Marco. “Saving Social Security in the 21st Century” National Review. 15 Aug 2015. Web. Accessed on 23 Feb 2016 at http://www.nationalreview.com/article/422581/saving-social-security-21st-century-marco-rubio
 Time Staff. “Donald Trump Explains All” Time. 20 Aug 2015. Web. Accessed on 23 Feb 2016 at http://time.com/4003734/donald-trump-interview-transcript/
 Clinton Campaign. “Hillary Clinton: Wall Street Should Work for Main Street” HillaryClinton.com. Web. Accessed on 23 Feb 2016 at https://www.hillaryclinton.com/briefing/factsheets/2015/10/08/wall-street-work-for-main-street/
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