In a nod to the progressive-wing of the Democratic Party, presidential candidate Hillary Clinton proposed an increase in the federal estate tax on Thursday for all inherited property valued at over $500 million per individual.
Clinton’s revenue-friendly overhaul will help pay for an increase in child tax credits for working parents, and includes raising the base-rate from 40 to 45 percent and a lowering of the tax eligible threshold from $5.45 million to $3.5 million.
Individuals who inherit more than $500 million and couples receiving over $1 billion will be subject to a top rate of 65 percent — the highest rate since the 1980s — a proposal touted by Bernie Sanders during the Vermont senator’s Democratic primary campaign.
Inherited real estate, cash, stock and other valuable property are subject to the so-called “death tax”, a phrase preferred by some conservative Republicans who oppose penalizing heirs.
The former Secretary of State has also offered imposing capital gains taxes on inherited assets, which along with the increased estate tax will raise an additional $260 billion over the next 10 years, according to the Committee for a Responsible Federal Budget.
“No family will have to pay the death tax,” Trump said in August. “American workers have paid taxes their whole lives. It’s just plain wrong and most people agree with that. We will repeal it.”
According to the non-partisan Center on Budget and Policy Priorities, only .2 percent of all inheritances are subject to the estate tax under current law.
Despite the minuscule overall effect on the general population, House Ways and Mean Committee Chairman Kevin Brady (R-Texas) said in a statement later on Thursday that Clinton’s proposal would be “dead on arrival” in Congress.
[Reuters] [CNBC] [Forbes] [Image courtesy Emil Lendof/The Daily Beast]