Donald Trump’s proposal to offer all businesses a flat 15 percent income-tax rate would prompt workers to try to cut their tax bills by turning themselves into “self-employed” contractors -- without leaving their current employer -- according to a tax-policy group’s report.

Trump, the Republican presidential nominee, has proposed a 15 percent tax rate on business income -- whether it’s generated by a multinational corporation, a mom-and-pop grocery or a private-equity fund.

Because it would offer such an advantageous tax rate, the proposal “would create a strong incentive for many wage earners to form” their own businesses and provide “labor services to their current employer,” said the report by the Washington-based Tax Policy Center. If half of those who earn more than $100,000 a year eventually made that change, federal revenue would drop by $894 billion over a decade, the center found.

A Trump campaign spokeswoman didn’t immediately respond to a request for comment.

The report, which was released Tuesday, was paired with an analysis of Hillary Clinton’s tax plan. In general, the twin reports found that under Clinton, the Democratic nominee, federal revenue would increase by $1.4 trillion over a decade, with the top 1 percent of earners paying roughly 90 percent of the increase. Trump’s plan, meanwhile, would decrease federal revenue by $6.2 trillion over that period, with the top 1 percent getting almost half the benefit.

‘More Different’

The two plans “really couldn’t be more different,” said Len Burman, the director of the tax-policy center.

Clinton’s campaign issued a statement saying her plan “would provide middle-class tax relief and pay for investments in good-paying jobs by requiring the wealthy, Wall Street and large corporations to pay their fair share.” It also said Trump’s campaign would “give as much tax relief to the top 1 percent as everyone else combined.”

Both candidates have made extensive revisions to their tax plans over the past six weeks, and tax policy remains one of the starkest differences between them. Clinton seeks various tax increases aimed at high earners, while Trump proposes a menu of individual and business tax cuts.

Pass-Through Rules

One of Trump’s boldest proposals would change tax rules for partnerships, limited liability companies, sole proprietorships and other so-called “pass-through” business entities. Under current law, businesses organized as pass-throughs -- which include small businesses as well as private-equity firms and hedge funds -- don’t pay income taxes themselves. They pass their earnings to their owners, who then pay tax at their individual income-tax rates.

Because the current top individual rate is 39.6 percent, Trump’s initial proposal would have represented a major savings for high-income pass-throughs. Last month, his advisers changed the proposal: Pass-through businesses would be able to choose to pay the 15 percent rate -- if they retained their earnings instead of passing them through to owners. In assessing Trump’s plan, the Tax Policy Center’s economists assumed that owners would pay capital gains taxes on any distributions they received from their businesses -- though owners of small businesses would be exempt from that requirement.

Trump’s official website last month briefly posted an explanation that said, “small business owners who elect to be taxed under the 15 percent business tax rate will not face double taxation” -- language that appears to be aimed at exempting them from paying a 20 percent tax rate on distributed profit. But the statement was quickly removed from the website, and the campaign has never defined what it meant by “small.”

‘Clear Guidance’

Trump’s campaign has yet to “provide clear guidance” on the plan, according to the center’s report. For its analysis, the center assumed that businesses making less than $500,000 a year would qualify for the exemption from taxes on distributed earnings.

Trump also proposes to collapse the current seven individual income-tax brackets to three: 12 percent, 25 percent and 33 percent. “The 18 percentage point differential between the top rate on pass-through business income and wages would create a strong incentive for many wage earners” to seek the lower rate, the report said.

Top 1 Percent

On Clinton, the center’s analysis found that the top 1 percent of households, by income, would pay more than 90 percent of the tax increases that she has proposed. Those include a applying a 4 percent surcharge on incomes higher than $5 million; requiring a minimum tax rate of 30 percent on incomes of $2 million or more; and limiting the tax benefit of many tax deductions.

On average, filers in the bottom 80 percent of the national income distribution would see an increase in their after-tax income of less than 0.8 percent under her plan, the center found. The average benefit for the bottom four-fifths of taxpayers would be no more than $140.

In the first year under her tax plan, the top 1 percent would pay additional federal taxes of $117,760, on average, and the top 0.1 percent would pay $805,250 more, on average, according to the report.

The center’s analysis included Clinton’s latest proposal -- doubling the child tax credit to $2,000 per child for eligible families who have children age 4 and under and expanding the amount of the credit that can be paid as a refund to those who owe no income tax. Clinton’s campaign announced the change Tuesday, but didn’t cite a cost -- which the tax-policy center’s report pegged at $208.7 billion over 10 years.

‘Down Payment’

In a news release, Clinton’s campaign described the proposed expansion of the credit as “a down payment on further relief for middle-class families.” Asked if policy analysts expect Clinton to announce more proposals to benefit the middle class, Burman, the tax-policy center’s director, said: “My assumption is, this is the middle-class tax cut.”

For Trump, the center found more after-tax gains for all income levels -- but far more for those at the top. In the first year of his plan, the bottom 20 percent of taxpayers would see an average cut of $110, and those whose incomes rank them between the 60th and 80th percentiles would get an average cut of $2,030, according to the report. Meanwhile, the top 1 percent would get an average cut of $214,690 and the top 0.1 percent would get an average cut of $1,066,460, the analysis found.

Most individual filers would see at least some increase in their after-tax income, the center found -- though portions of Trump’s plan that repeal personal exemptions and the “head of household” filing status “would cause many large families and single parents to face tax increases,” according to the analysis.

Estate Tax

Trump also proposes slashing the 35 percent corporate tax rate to 15 percent -- his single largest tax cut -- which would reduce federal revenue by almost $2.4 trillion over a decade, according to the center’s report.

One of the more pronounced tax-policy differences between Trump and Clinton involves the estate tax, which currently applies a 40 percent rate to any estate worth more than $5.45 million. Trump wants to abolish the tax, while Clinton wants to increase it.

Trump’s plan would eliminate estate and gift taxes, the center’s report said -- but it would tax capital gains above $5 million (or $10 million for married couples) at death. His changes would reduce federal revenue collections by $174.2 billion over 10 years.

Clinton wants to increase the estate tax rate to 45 percent and apply it to estates worth more than $3.5 million. For estates worth more than $10 million, the rate would increase to 50 percent; above $50 million, the rate would be 55 percent; and above $500 million, the rate would be 65 percent. Her estate-tax proposal would raise $410.4 billion over 10 years, according to the center’s analysis.

This article was provided by Bloomberg News.