Your Money Is Ours

Hillary Clinton announced an updated estate tax proposal today. After previously supporting an increase in the estate tax rate from 40% to 45% and decreasing the amount of tax free assets to $3.5 million, she now wants to tax estates exceeding $10 million at 50%, estates exceeding $50 million at 55%, and estates exceeding $500 million at 65%. She also wants to remove the stepped up basis provision for estates so appreciated assets would also be subject to capital gains tax at death.

Two quick points without being too political because the proposal speaks for itself:

1. Apparently Hillary believes the Senator Warren adage that "you did not build this" so we are going to tax it mantra.

2. No word from her billionaire buddies Soros, Zuckerberg, Gates, and Buffet on how they feel about the government possibly taking 65% of their wealth and, frankly, I don't give a damn about them.

Feel the Burn?

Last week Bernie Sanders released his tax increase plan for paying for his $1.4 trillion annual single payer health care plan. Among other hefty increases, his plan would increase the estate tax on the “wealthiest .3% of Americans who inherit more than $3.5 million” to raise an additional $21 billion annually. The specifics are lacking, but the plan resembles President Obama’s annual budget proposals which call for the same reduction in the estate tax exemption to $3.5 million from the current $5.45 million, an increase in the estate tax rate from 40% to 45%, and no indexing of the exemption amount to inflation.

Two quick points:

1. As an estate planner who lived through 12 years of uncertainty with the estate tax exemption, it is disappointing to see politicians inject uncertainty back into the estate planning arena which makes planning difficult for clients and their families.

2. A plan that equals 40% of the current federal budget does not have enough rich people to gouge to pay for it so of course Sanders has to resort to taxing the dead more to try to pay for it.