Hillary Clinton Proposes 65 Per Cent Tax On US Billionaire Estates

Still hoping to boost her middle-class bona fides in a tight presidential race, Hillary Clinton just took another swipe at the super-rich. Sanders has released a statement in support of the tax plan, saying that “Secretary Clinton understands that it is appropriate to ask the top three-tenths of 1 percent…to pay their fair share of taxes”. But bigger estates would face rates of up to 65 percent for property valued at more than $1 billion per couple, under her proposal, an update of an earlier plan. “That’s a MASSIVE increase”. Republicans generally oppose the estate tax.

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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. A move Trump’s campaign called “hypocritical”. 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.

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. Then, when your heir sells that stock, they only pay capital gains taxes on the difference between the sale price and the value of the asset upon inheritance.

The latest changes are part of a series of tax increases Mrs. Clinton has rolled out to pay for targeted tax cuts and for increased spending.

The Wall Street Journal points out other dissenters including Rep. Kevin Brady, who calls the plan “dead on arrival” and claims that small businesses will suffer heavily from it. Clinton’s campaign has said protections will be put in place for small businesses and family held enterprises such as farms. (The Committee for a Responsible Federal Budget, a nonpartisan entity that urges fiscal restraint, says that her math checks out).

The Clinton campaign estimates that the increase would raise an addition $75 billion in revenue over the next decade.

Clinton’s final plan change would limit like-kind exchanges, which is a feature of the tax code real estate investors commonly use to defer capital gains taxes. But the burden of this new tax structure would be concentrated on very wealthy households.