Channeling Sanders, Clinton Proposes Whopping Billionaire Estate Tax
Clinton also adopted tax structure advocated by Sanders during primary campaign
In a nod to her former opponent, Democratic presidential nominee Hillary Clinton on Thursday proposed steeply elevating the estate tax for the wealthiest Americans.
The former Secretary of State now advocates an estate tax of 65 percent, and said she would lower the cutoff for the estate tax to those estates worth more than $3.5 million—a tax structure first put forth by Sen. Bernie Sanders (I-Vt.), who ran against Clinton during the Democratic presidential primary.
"Secretary Clinton understands that it is appropriate to ask the top three-tenths of 1 percent, the very wealthiest people in this country, to pay their fair share of taxes so that we can provide a child tax credit for millions of working families and lower taxes for small businesses," Sanders told Wall Street Journal after the policy change was announced.
Clinton had previously proposed a 45 percent estate tax rate; the current rate is 40 percent and only applies to estates worth over $5.4 million.
Clinton's proposed reforms would elevate the estate tax rate to its highest level since 1981, the Wall Street Journal notes.
"Beyond all that," writes Slate, "Clinton has said she would largely do away with the step-up in basis at death, a rule that allows lucky heirs to avoid paying capital gains taxes that, say, their parents or uncle or other rich benefactor would have owed had they sold their stock before passing away."
The Committee for a Responsible Budget, which describes itself as a non-partisan non-profit devoted to informing the public about fiscal policy, calculates that taken together, Clinton's tax proposals would increase federal revenue by $260 billion over the next decade, and would more than pay for her proposals to expand the child tax credit and to simplify taxes on small businesses.
But given the current makeup of Congress, it seems unlikely that Clinton's reforms will come to pass: "House Speaker Paul Ryan wants to eliminate the estate tax altogether," as Slate observes.
Clinton's proposal, however, highlights how few Americans are affected by what conservatives often refer to as the "death tax."
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, currently owe any estate tax because the first $5.45 million per person is exempt."
"In 2014, just 223 estates with a gross value exceeding $50 million filed taxable estate-tax returns, according to the Internal Revenue Service," the Wall Street Journal points out.
That statistic means that out only about .00018 percent of all U.S. households paid an estate tax at all in 2014.
"Still, the plan drew immediate protests from conservatives," reports the Washington Post, "including the Trump campaign, which labeled it an 'even more dramatic hike in the death tax.'"