Clinton Seeks Big Jump in Estate Tax

The following extracts from these two articles by Richard Rubin for the Wall Street Journal seem to indicate that Felicia Wong, president of the Roosevelt Institute, may be about to have her dream (and ours) fulfilled. Do you recall our August 6 blog: “Could Hillary Become the Champion of the 99 Percent?” If what he writes is true, Hillary seems well on the way to becoming our knight in shining armor. Read on:

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images-22By RICHARD RUBIN, Sept. 22, 2016

Democratic presidential candidate Hillary Clinton wants to levy a 65% tax on the largest estates—up from today’s 40%—and make it harder for wealthy people to pass appreciated assets on to their heirs without paying taxes.

The proposals mark an expansion of the tax increases Mrs. Clinton would impose on the uppermost sliver of America’s affluent.

The increase in estate and gift taxes and other new items Mrs. Clinton detailed Thursday follow two ideas central to her campaign. First, she pairs proposed spending increases and tax cuts with tax increases to prevent projected budget deficits from growing. And she targets tax increases at the top of the income and wealth scale.

The latest proposals would generate $260 billion over the next decade, enough to pay for her plans to simplify small-business taxes and expand the child tax credit, according to the nonpartisan Committee for a Responsible Federal Budget, which advocates fiscal restraint.

In all, Mrs. Clinton would raise taxes by about $1.5 trillion over the next decade to pay for expanded education assistance, paid family leave and other programs. She would increase federal revenue by about 4%, though the added burden would be concentrated on relatively few households.

With her own form of populism, she is drawing a particularly sharp contrast with her Republican rival, Donald Trump, who favors repealing the estate tax and advocates steep cuts in business tax rates.

The two sides are now at least $6 trillion apart on tax policy as they head into their first debate Monday. . .

Mrs. Clinton’s proposals would add about $200 billion in debt over a decade but are expected to be debt-neutral after she details her business-tax plan, the budget group and her campaign say.

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Felicia Wong, president of the Roosevelt Institute, a think tank dedicated to the furthering and perpetuation of the ideals of the Roosevelt New Deal

The Clinton campaign changed its previous estate-tax plan—which called for a 45% top rate—by adding three new tax brackets and adopting the structure proposed by Sen. Bernie Sanders of Vermont during the Democratic primaries.

The former secretary of state would exempt the first $3.5 million of an estate from taxes—compared to the current $5.45 million exemption. She would impose a 45% marginal rate on many estates with assets between $3.5 million and $10 million.

Beyond that $10 million threshold, a 50% rate would start kicking in, then a 55% rate would start at $50 million. The top rate of 65% would affect only those with assets exceeding $500 million for a single person.

The $3.5 million exemption and that $500 million threshold for the top rate would be doubled for married couples, though the $10 million and $50 million thresholds would not be doubled. The same thresholds would also apply to gifts during a person’s lifetime.

In 2014, just 223 estates with a gross value exceeding $50 million filed taxable estate-tax returns, according to the Internal Revenue Service.

“Secretary Clinton understands that it is appropriate to ask the top three-tenths of 1%, 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,” Mr. Sanders said in a statement.

The 65% estate-tax rate would be the highest since 1981 and marks one of the widest gulfs between Mrs. Clinton and Mr. Trump on a subject where they have little in common. . .

Mrs. Clinton would face a major challenge getting those taxes through Congress, especially if Republicans continue to control the House or Senate. The current top estate tax rate of 40% was set in a bipartisan compromise in January 2013. . .

Republicans and their allies in the business world see it as an unfair confiscation of wealth that punishes family-owned companies. Democrats see it as a leveling tool to combat increasingly concentrated wealth, and say the impact would largely be felt by a very small number of people. . .

There would be an exemption aimed at focusing the tax on high-income families, and Mrs. Clinton’s proposal, the campaign said, would include “careful protections and flexibility for small and closely held businesses, farms and homes, and personal property and family heirlooms.”

But the combination of the 65% top estate tax and the change to capital-gains rules could lead to significant increases in effective tax rates at death on some people—including, for example, Mr. Trump, who claims a net worth exceeding $10 billion.

Clinton Targets Top 1% for Tax Increase

By RICHARD RUBIN, Updated Oct. 7, 2016

The top-earning 1% of U.S. households—and especially the top 0.1%—have a lot to lose from Hillary Clinton ’s tax proposals.

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The Democratic presidential nominee would concentrate her tax agenda on fewer than 1.5 million households by adding layers of taxation and sealing gaps that let some of their earnings get taxed relatively lightly. She would impose the highest marginal tax rates on top earners since the 1986 revamp of the tax code and boost taxes on business income, investments and estates. She would cap tax breaks while targeting a series of narrower tax-avoidance and -deferral techniques used in the real-estate and private-equity industries.

The Democrat sees having the rich pay more as a way to pay for tax breaks and expanded benefits for middle-income families, and she has said households earning less than $250,000 wouldn’t see a tax increase. Her proposals add up to about $1.9 trillion in tax increases over a decade, according to the Committee for a Responsible Federal Budget. . . The Clinton tax plan would advance nearly all of President Barack Obama ’s unfinished business on taxing high-income households. Then she would adopt Sen. Bernie Sanders’s structure for a higher estate tax and tack on a few ideas of her own, such as a 4% surcharge on income over $5 million. More so than the current tax code or Mr. Obama’s proposals, Mrs. Clinton’s policies are targeted specifically at the ultrawealthy. . .

Overall, Mrs. Clinton’s proposal would add about 4% to federal tax collections over the next decade and push taxes as a share of the economy higher but not past the post-World War II peaks.

  • But the brunt of that impact would fall on a sliver of the population,
  • with nearly 80% of the higher taxes hitting the top 1% of households
  • and more than half hitting the top 0.1%, according to the Tax Policy
  • The center, using a broader definition of income than is shown
  • On tax returns, sets about $732,000 in annual household income as
  • being in the top 1% and $3.8 million for the top 0.1%. . .

The share of U.S. income earned by the top 1% has roughly doubled over the past 30 years, according to estimates by economist Emmanuel Saez and others. The top 1% now get about 17% of the nation’s income before taxes and pay 28% of federal taxes as a result of the progressive tax code, according to the Tax Policy Center. . .

Mrs. Clinton’s proposed tax increases, in combination with tax breaks for parents, caregivers and people with out-of-pocket health care costs, would make the U.S. even more reliant on high-income taxpayers than it is now.

A proposal to impose a minimum 30% tax rate on households with incomes over $2 million would prevent people from paying low tax rates by getting the majority of their money from investments.

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