On top of that, she would impose a 4% surcharge on adjusted gross income over $5 million.
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On Thursday, the Democratic presidential nominee’s campaign said in an updated fact sheet that Clinton “will go further than that for estates valued in the tens and hundreds of millions, with higher rates as values rise, up to a 65% rate on estates valued at over $1 billion per couple”.
One of the (many) problems with the death tax is that it doesn’t affect the exceedingly wealthy, who set up foundations, trusts, etc.
Indeed, Reuters reports that the “nonpartisan Center on Budget and Policy Priorities said this month that only the estates of the wealthiest 0.2 percent of Americans, about two out of every 1,000 people who die, now owe any estate tax because the first $5.45 million per person is exempt”.
Known by conservative opponents as the “death tax”, the estate tax, levied on property transferred to heirs after its owner dies, now is imposed only on inherited assets worth $5.4 million or more for an individual. In 1976, almost 8 percent of all deaths resulted in an estate tax.
“These proposals reflect Hillary Clinton’s approach to growing our economy: making investments in good-paying jobs and the middle class, paid for by closing loopholes and asking the wealthiest to pay their fair share – even as Donald Trump wants to give trillions in tax breaks tilted towards the wealthy”, said Mike Shapiro, an economic policy adviser to Mrs. Clinton.
Clinton’s proposal, however, highlights how few Americans are affected by what conservatives often refer to as the “death tax”. The merely rich, meanwhile, see the really rich advocating tax policies that harm their ability to leave what they have to their children. That would increase to 50 percent for estates valued up to $50 million and 55 percent for those valued up to a billion dollars.
The U.S. hasn’t had a top estate tax rate this high since Ronald Reagan took office.
Still, the tax carries symbolic and political weight.
According to The Washington Post, Clinton’s highest taxes would apply to only a small section of very wealthy Americans. According to The Wall Street Journal, this proposal and other tax increases could generate up to $260 billion over the next decade and represents the Clinton campaign’s adoption of tax brackets and structures used by Sanders during the primary race. The plan would also repeal a feature of the tax code known as the “step-up basis” that dramatically reduces capital gains tax bills heirs pay after inheriting valuable assets.
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Clinton may make some exceptions, such as for beneficiaries making less than $250,000, and offer protections to those who inherit non-financial assets such as a business or home.
