Presidential candidate, Bernie Sanders (I-Vt) introduced legislation to increase the federal estate tax. The press release, which links to Senator Sanders’ legislation and description is as follows:
Sen. Bernie Sanders (I-Vt.) today introduced legislation to increase estate tax rates on the top three-tenths of one percent of Americans who inherit more than $3.5 million, while eliminating loopholes that have allowed the wealthiest Americans to avoid billions in taxes. Sanders said the legislation was needed to reduce the massive gap between the very rich and working class Americans.
The announcement was the latest tax reform proposal from Sanders, who has made the issue of reducing skyrocketing income and wealth inequality one of his central goals since becoming ranking member of the Senate Budget Committee.
“Our nation cannot survive morally or economically when so few have so much while so many have so little. We need a tax system which asks the billionaire class to pay its fair share of taxes and which reduces the obscene degree of wealth inequality in America,” Sanders said.
His plan has already won praise from tax advocates and some of the leading progressive voices in the country and around the world, including Robert Reich who was labor secretary for President Clinton, and Thomas Piketty, author of Capital in the Twenty-First Century.
“The fairest way to reduce wealth inequality, rebuild the disappearing middle class, and preserve our democracy is to enact a progressive estate tax on multi-millionaires and billionaires,” Sanders said.
Only the very wealthiest millionaires and billionaires would be effected by the Sanders plan; 99.75 percent of Americans would not pay a penny more in estate taxes.
Sanders’ bill does the following:
Lowers the estate tax exemption level from $5.4 million to $3.5 million for individuals and from about $11 million to $7 million for couples.
Increases the marginal tax rate to 45 percent on estates between $3.5 million to $10 million, 50 percent on estates between $10 million and $50 million, and 55 percent on estates over $50 million.
Creates a new billionaire surtax of 10 percent that would only impact 530 billionaires who are worth a combined $2.6 trillion.
Ends loopholes allowing billionaire families to set up dynasty trusts to avoid taxes.
Closes loopholes used by the wealthy to avoid estate taxes.
Protects family farms and conservation easements.
Positive reaction to Sanders bill was widespread:
America “is creating an aristocracy of wealth populated by heirs who don’t have to work for a living yet have great influence over how the nation’s productive assets are deployed,” said Reich.
Piketty, the top-selling author and Paris School of Economics professor, said: “We need stronger investment in skills and education, better paying jobs and a more progressive tax system. Sen. Sanders’ estate tax bill is an important step in this direction.”
For a more detailed description of the Sanders bill, click HERE.
For a copy of the legislation, click HERE.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.