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Tax policy has figured prominently in this presidential election cycle, with both major party candidates releasing tax proposals and, on the campaign trail, frequently discussing how their tax policy changes would affect Americans.

Hillary Clinton has released a tax plan that would increase taxes on wealthy Americans and increase federal revenue by more than a trillion dollars over the next decade. Donald Trump proposes a tax cut that will cost an estimated $4.8 trillion over a decade and would largely benefit the wealthy.

During Monday night’s debate, both candidates seized on the tax issue. Below are some clarifications of the political spin.

Large Tax Cuts and Debt Reduction Don’t Go Together

Throughout the debate, Mr. Trump several times pointed to the nation’s $20 trillion national debt as a reason to change course on fiscal policy. At the same time, he proposes an-across-the-board tax cut of at least $4.8 trillion of which the lion’s share, 44 percent, would go to the richest 1 percent of households. Reducing annual deficits and cutting taxes on this scale are incongruous policy ideas, particularly if there are no plans to slash spending on the same scale.  According to an analysis by the Committee for Responsible Budget (CFRB), Mr. Trump has only proposed about $1.2 trillion in net spending cuts over the next 10 years, which does not come close to making Trump’s tax cut plan budget neutral.

In fact, CFRB estimates that the added interest payments from the cost of deficit-financing his tax cuts would wipe out more than half the spending cuts he is proposing. In other words, Trump’s plan would dig the country trillions deeper into debt, not help the country get out of it.

Secretary Clinton’s tax plan would enact a series of tax increases on the wealthiest Americans, including the so-called Buffett Rule, a separate surcharge on income over $5 million and ending the stepped-up basis loophole on capital gains income. The plan also includes a series of tax breaks to incentivize corporate profit sharing and for caregiving and excess out-of-pocket healthcare costs, among other ideas. From a deficit perspective, Secretary Clinton has ensured that all of her new spending and tax break proposals are matched up with revenue increasing proposals that ensure that they do not add to the deficit. Unfortunately, with the country facing a deficit of more than $9 trillion during the next decade, substantially more revenue than Secretary Clinton is proposing is needed just to keep up with the existing revenue gap.

Corporations’ Offshore Cash Could Provide an Influx of Revenue, But …

During the debate, Mr. Trump alluded to multinational corporations’ $2.4 trillion in earnings stashed offshore and his plan to enact a deemed repatriation rate of 10 percent on these earnings. He seemed to be supporting the ideologically driven argument that corporations are stashing money offshore because the U.S. corporate tax rate is too high and if the U.S. lowered its rate or provided a discounted rate upon repatriation, as some lawmakers have advocated, the U.S. could tap into this tax revenue.

Secretary Clinton said during the debate that she supports the “bringing back of money that’s stranded overseas” and that she does not believe Mr. Trump’s proposals would accomplish the repatriation of funds he’s betting on. Unfortunately, Sec. Clinton did not elaborate during the debate on her specific objections to Mr. Trump’s repatriation proposals, and her campaign has not laid out a specific plan on business tax reform. However, her campaign has specified that it would raise $275 billion from business tax reform, which tracks closely with the amount that would be raised through President Barack Obama’s 14 percent deemed repatriation proposal, a rate that is not substantially higher than Mr. Trump 10 percent proposal.

On the corporate tax argument, it is important not to buy into political rhetoric that says our U.S. businesses are faltering. U.S. corporations are competitive and profitable. The average effective tax rate for profitable Fortune 500 corporations is just 19.4 percent, just over half the statutory rate of 35 percent. In fact, far too many profitable, large corporations pay nothing in taxes in many years. From a comparative perspective, the U.S. corporate tax level is below average compared to other for developed countries.

The real issue with regard to corporations holding trillions in profits offshore to avoid U.S. taxes is that our federal tax system allows companies to defer paying taxes on foreign profits until they are repatriated, which creates an incentive for companies to engage in accounting tricks and book U.S.-earned profits in offshore tax havens. Rather than give companies huge tax breaks, the better solution would be to simply close the loopholes that allow companies to move offshore and to require companies to immediately pay U.S. taxes on their offshore earnings.

What Can We Learn From Candidates’ Tax Returns?

Mr. Trump reiterated during the debate that he does not plan to release his tax returns because they are under audit and went on to argue that not much information can be deemed from tax returns in any case. Both points get wrong important facts about tax return information.

First, the IRS has already stated that Mr. Trump can release his tax returns, even those under audit. More importantly and to state the obvious, tax returns provide critical information about whether a candidate is paying taxes, their effective tax rate, their charitable contributions, and in the case of Mr. Trump, information about his business dealings. Finally, tax returns provide a great deal of information on a person’s business and financial relationships and can reveal private conflicts of interest. In 2012, we learned that Mitt Romney, despite great wealth, paid a lower effective rate than many middle-class families. We also know, for example, information about how and from whom Secretary Clinton and former President Clinton earned their money, and we also know how much they have contributed to their charitable foundation and what their effective tax rate is. Furthermore, although not required by law, every Republican and Democratic presidential candidate since Richard Nixon (Gerald Ford released a summary) has released their tax returns.

The Value-Added Tax (VAT)

Mr. Trump raised Mexico’s VAT during a discussion of NAFTA and trade. In so many words, he said Mexico’s VAT puts U.S. exporters at a disadvantage because it places a “16 percent, approximately” tax on U.S. products. It’s important to note that Mexico’s VAT is not a tariff. The consumption tax also applies to domestically made products, meaning that the VAT gives no tax advantage in Mexico to buying Mexican over American products. Moreover, Mexican products also face a similar tax in the U.S. in the form of the state and local sales taxes levied by most states. And of course, Mexico is far from the only nation to levy a VAT. If Mr. Trump is pure in the idea that VATs put U.S. exporters at an economic disadvantage, then he would have to shut down trade with France, Germany, Great Britain and a host of countries across the globe.