On Thursday, Hillary Clinton drastically increased the top rate in her estate-tax plan, calling for Uncle Sam to impose a 65 percent tax on the assets of people who die with more than $500 million in wealth to their names. Previously, Clinton had called for a 45 percent top rate — only marginally higher than the 40 percent one we have now. Her new proposal is modeled after that of her primary opponent Bernie Sanders, and it represents a significant increase in the Democratic nominee’s appetite for soaking the rich. Under the plan, the government would also impose a 50 percent tax on estates over $10 million and a 55 percent one on those at or above $50 million.
Clinton also unveiled new rules for the taxation of inherited capital assets. Right now, if you die with an appreciated asset — say, some Apple stock that you bought decades ago — you can pass on that stock to your favorite kid or lover without paying any capital-gains taxes on the increase in value between when you purchased it and when you passed. 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. Under Clinton’s plan, the bequest of an asset would be taxed like the realization of capital gains, though she would include targeted exemptions for “small and closely held businesses, farms and homes, and personal property and family heirlooms.”
Taken together, these two proposals would generate $260 billion over the next decade, which Clinton would use to finance some tax cuts on small businesses and an expansion of the child tax credit. (The Committee for a Responsible Federal Budget, a nonpartisan entity that urges fiscal restraint, says that her math checks out).
Donald Trump, by contrast, has proposed repealing the estate tax entirely — a policy that would ostensibly provide Trump’s kids with an extra $4 billion in inheritance (assuming he is worth what he claims to be).
On Friday, Trump railed against Clinton’s proposal, noting that nothing brings Republicans together like their commitment to concentrating wealth in the hands of a parasitic class of silver-spoon-sucking rentiers with terrible hobbies.