Hillary Clinton proposed on Thursday a new series of progressive taxes that would raise rates on the nation’s ultra-rich. The most significant of her new proposals calls for raising the top estate tax rate to 65% from the current 40%, a move that would generate about $260 billion in new government revenue over the next decade.
Clinton had already proposed raising the rate on some millionaires to 45%, but her new plan, drawing heavily on that of her social democratic primary challenger Sen. Bernie Sanders (D-VT), would be even more progressive. Three new estate tax brackets would be added under the new system: a 50% rate for couples with estates valued over $10 million, a 55% rate for couples with estates valued over $50 million, and a 65% rate for couples with estates valued over $1 billion.
Although the Trump campaign predictably railed against an “even higher hike in the death tax,” only an infinitesimal number of incredibly wealthy Americans would be affected by the new rates. According to IRS data only 223 estates with taxable value over $50 million filed estate tax claims in 2014, and there are fewer than 1,000 people in the entire country who would ever be subjected to the highest rate. This very minimal burden on a tiny number of families that are more than able to shoulder it would pay for Clinton’s proposed simplification of small business taxes and expansion of the child tax credit, programs that will millions of Americans.
While cynical Republican demagogues have painted the estate tax as an oppressive punishment for small businesses, couples with less than $5.5 million in assets – or 99.8% of the nation – pay no estate tax at all. The rhetorical acrobatics and outright lies required to convince the average American that they are at risk from the so-called “death tax” is astounding. In reality, Clinton’s proposed hikes would actually lessen the tax burden on small businesses by financing a simplification of the business tax code.
All in all, Clinton’s tax proposals would generate about $1.5 trillion in new revenue over the next decade, with the vast majority of the burden falling on the super-rich. Donald Trump, in contrast, has called for eliminating the estate tax entirely and slashing taxes by $12 trillion over the next decade, a move that most reasonable economists agree would cause a severe recession and eliminate a staggering 3.5 million jobs.
The Clinton campaign reportedly collaborated with Sen. Sanders’ former economic advisers to produce the new estate tax plan, and indeed it is almost identical to Sanders’ primary proposal. Today’s announcement was thus one of the most concrete examples of Clinton’s shifting leftward in an attempt to win over skeptical progressives who supported Sanders in the primary. Sanders himself praised the proposal and released a statement endorsing it, saying that “Secretary Clinton understands that it is appropriate to ask the top three-tenths of 1%, 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.”
James DeVinne is a student at American University in Washington, DC majoring in International Service with a focus on the Middle East and South Asia. He is a founding member of Occupy Baltimore and interns at the Tahrir Institute for Middle East Policy.