Hillary Clinton proposed new tax hikes on wealthy families to pay for new spending programs on Thursday, including a special tax rate of 65 percent on estates over $1 billion.
The Democrat’s newest proposals would further tax wealthy families, especially families that look like that of her opponent Donald Trump, to finance her planned expansion of government programs.
The changed tax plans, outlined on the Democratic nominee’s campaign website, were shared with the nonprofit group Committee for a Responsible Federal Budget to help with an analysis of her tax and spending plans. The group published them Thursday.
In addition to increasing the estate tax, Clinton proposes to tax more capital gains at the death of the asset’s owner and to limit a feature of the tax code that allows real estate investors to avoid capital gains taxes. All of the tax increases are aimed at taxing high-income earners to finance Clinton’s agenda.
The estate tax hike, which would raise the rate for very wealthy families up to 65 percent on estates valued at more than $1 billion per couple, would raise $75 billion over 10 years, according to the Committee for a Responsible Federal Budget.
Trump spokesman Jason Miller said in a statement that it “is the height of hypocrisy for Hillary Clinton to offer an even more dramatic hike in the death tax at the same time she uses exotic tax loopholes reserved for the very wealthy to exempt her Chappaqua estate,” referencing a 2014 Bloomberg story detailing the Clinton family’s tax planning around the estate tax.
Earlier in her campaign, Clinton had proposed raising estate taxes for more families. She would revert to the 2009 tax rate of 45 percent, up from 40 percent currently, and reduce the exemption from about $11 million today to $7 million per couple. The latest increase would likely only apply to a small number of benefactors each year.
In comparison, congressional Republicans and Trump have called for eliminating the estate tax.
Even larger than the new estate tax increase, however, would be the changes Clinton would make to the way capital gains are taxed at death, which would raise $150 billion in a decade.
Today, when family members are given an asset on which the decedent had not realized gains, they are not taxed on all of the gains when they realize them. Instead, they are taxed only on the gains realized since the descendent passed away, a feature of the tax code known as the “step-up in basis.” Clinton would largely eliminate the step-up, taxing capital gains at death as though it were the sale of a stock. She would plan to prevent the tax from affecting non-rich families, however.
Lastly, Clinton would limit a provision of the tax code that allows companies to avoid taxes on capital gains on property if those gains are immediately reinvested in similar property. Such “like-kind exchanges” represent a major tax break used by real estate companies and developers like Trump. Eliminating it would raise about $35 billion.
