To win a campaign, you have to give voters – and especially your voters – what they want. In Hillary Clinton’s case, a lot of her voters really want Bernie Sanders.
No problem! When Clinton rolled out her new-and-improved tax proposals last week, she was not merely channeling her inner Sanders, she was channeling Sanders’ inner Sanders. A 50 percent federal estate tax bracket for estates starting from $10 million (an amount that, for married couples, is fully exempt today) would rise to 65 percent for estates greater than $1 billion. And that is even before we consider the impact of state death taxes, which still exist in 16 states – mostly blue ones – at rates up to an additional 20 percent.
This is Clinton’s tax plan, but Sanders did the most and loudest crowing. He said the proposal would respond to the “grotesque level of wealth” concentrated among the wealthiest Americans, according to The Wall Street Journal. He also said that “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.”
For Sanders supporters still hesitant to board the Clinton train, it seems as if their preferred former candidate is giving them a solid push from the platform.
Besides reviving the 2012 Democratic battle cry against “millionaires and billionaires,” the Clinton tax proposal would add yet another 4 percent surcharge to the income tax system (initially targeted at incomes over $5 million), restrict like-kind exchanges that defer tax in business transactions that do not generate cash with which to pay the Internal Revenue Service (not Clinton’s concern), raise capital gains taxes on assets held less than six years (on the apparent theory that investments should not mature any faster than a fine wine), and impose a version of the “Buffett rule,” invoking a flat 30 percent minimum tax regardless of other deductions, which works as long as the major donations to the Clinton Foundation come from people who are not Clintons.
About the only thing missing is a 100 percent estate tax bracket applicable to anyone named Trump. Such a provision could serve the purpose of convincing Ivanka Trump that continuing to work in her father’s family business is pointless and that she would be better off accepting a job from Chelsea Clinton at the Clinton Foundation instead.
There was a time not long ago when Democrats bristled at being portrayed as all about higher taxes and more spending. Clinton, instead, has embraced that policy. Of course, her caveat to voters is that the higher taxes will only burden someone else, as though wealthy people and their sophisticated advisers would actually stand by and create wealth for the government to confiscate. Robin Hood tax policy never works in the long run, but when you are promising everything from debt-free college to a “public option” that would convert private health insurance losses into a new government entitlement, you need to have a plan. This one is Clinton’s, if by way of Sanders.
Trump wants to repeal the estate tax and cut taxes generally. He also wants to increase spending significantly, at least in the military and on certain construction projects along the Mexico border. He doesn’t have much of a plan to pay for it (other than to get Mexico to pay for the aforementioned construction), but that does not seem to bother him. No sense sweating the small stuff.
At least we can’t say the election does not give us a choice. It may not be a choice that we relish, but after we get past the fact that these are two of the least-admired presidential candidates in at least a century, there are plenty of genuine and meaningful policy differences between them.
Maybe Bernie Sanders will step up his game with a proposal for a special “Trump-only” estate tax. If he does so before Election Day, I think his chances of getting Clinton to sign on are pretty good.
Posted by Larry M. Elkin, CPA, CFP®
photo by Flickr user neverbutterfly
To win a campaign, you have to give voters – and especially your voters – what they want. In Hillary Clinton’s case, a lot of her voters really want Bernie Sanders.
No problem! When Clinton rolled out her new-and-improved tax proposals last week, she was not merely channeling her inner Sanders, she was channeling Sanders’ inner Sanders. A 50 percent federal estate tax bracket for estates starting from $10 million (an amount that, for married couples, is fully exempt today) would rise to 65 percent for estates greater than $1 billion. And that is even before we consider the impact of state death taxes, which still exist in 16 states – mostly blue ones – at rates up to an additional 20 percent.
This is Clinton’s tax plan, but Sanders did the most and loudest crowing. He said the proposal would respond to the “grotesque level of wealth” concentrated among the wealthiest Americans, according to The Wall Street Journal. He also said that “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.”
For Sanders supporters still hesitant to board the Clinton train, it seems as if their preferred former candidate is giving them a solid push from the platform.
Besides reviving the 2012 Democratic battle cry against “millionaires and billionaires,” the Clinton tax proposal would add yet another 4 percent surcharge to the income tax system (initially targeted at incomes over $5 million), restrict like-kind exchanges that defer tax in business transactions that do not generate cash with which to pay the Internal Revenue Service (not Clinton’s concern), raise capital gains taxes on assets held less than six years (on the apparent theory that investments should not mature any faster than a fine wine), and impose a version of the “Buffett rule,” invoking a flat 30 percent minimum tax regardless of other deductions, which works as long as the major donations to the Clinton Foundation come from people who are not Clintons.
About the only thing missing is a 100 percent estate tax bracket applicable to anyone named Trump. Such a provision could serve the purpose of convincing Ivanka Trump that continuing to work in her father’s family business is pointless and that she would be better off accepting a job from Chelsea Clinton at the Clinton Foundation instead.
There was a time not long ago when Democrats bristled at being portrayed as all about higher taxes and more spending. Clinton, instead, has embraced that policy. Of course, her caveat to voters is that the higher taxes will only burden someone else, as though wealthy people and their sophisticated advisers would actually stand by and create wealth for the government to confiscate. Robin Hood tax policy never works in the long run, but when you are promising everything from debt-free college to a “public option” that would convert private health insurance losses into a new government entitlement, you need to have a plan. This one is Clinton’s, if by way of Sanders.
Trump wants to repeal the estate tax and cut taxes generally. He also wants to increase spending significantly, at least in the military and on certain construction projects along the Mexico border. He doesn’t have much of a plan to pay for it (other than to get Mexico to pay for the aforementioned construction), but that does not seem to bother him. No sense sweating the small stuff.
At least we can’t say the election does not give us a choice. It may not be a choice that we relish, but after we get past the fact that these are two of the least-admired presidential candidates in at least a century, there are plenty of genuine and meaningful policy differences between them.
Maybe Bernie Sanders will step up his game with a proposal for a special “Trump-only” estate tax. If he does so before Election Day, I think his chances of getting Clinton to sign on are pretty good.
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