Clinton’s 65% Killer Death Tax The Democrat heads further toward Bernie Sanders Nirvana.
http://www.wsj.com/articles/clintons-65-killer-death-tax-1474586639
Hillary Clinton says she wants the votes of Republicans who are troubled by Donald Trump, but you wouldn’t know it from her continued left turns on the economy. On Thursday she decided that her proposal to raise the death tax to 45% from 40% isn’t enough and endorsed even higher levies that would apply to thousands of estates.
Though she defeated Bernie Sanders in the primary, she is adopting the socialist’s death-tax rate structure. She’d tax all estates over $10 million at 50%, apply a 55% rate on estates over $50 million, and go to 65% on assets above $500 million. The 65% rate would be the highest since 1981 and is another example of how she is repudiating the more moderate policies of her husband and the Democrats of the 1990s.
The left claims only the super-wealthy will pay high rates, but the Sanders plan that Mrs. Clinton is copying did not index exemption levels for inflation. One reason a bipartisan movement emerged to reform the death tax in the 1990s was because the then 55% rate engulfed ever more taxpayers over time. Mrs. Clinton would also end the “step-up in basis” on stock valuations for many filers, triggering big capital gains taxes for a much broader population.
She also knows most of her rich friends will set up foundations, as she and Bill Clinton have, to shelter most of their riches from the estate tax. As Americans have learned, these supposed charities can be terrific vehicles for employing political operatives while they wait for Chelsea to run for the Senate.
Mrs. Clinton must realize her plan has no chance of passing as long as Republicans hold the House or Senate, so it’s odd she would propose it now. Perhaps she can feel the national surge of non-enthusiasm for her candidacy and wants to mobilize the Bernie brigades with some more fervent class warfare. Or perhaps she’s so confident of victory she figures she and Speaker Nancy Pelosi could pull this off, or maybe she’s laying out a confiscatory rate as an opening negotiating bid with Republican Speaker Paul Ryan.
In any case, Mrs. Clinton is now promising total tax hikes of $1.5 trillion over a decade if elected President. Keep in mind this is part of her fiscal plan to grow the economy.
In better tax news, Congress is starting to push back against President Obama’s stealth death tax increase. Rep. Warren Davidson (R., Ohio) read our recent editorial about Treasury plans to raise taxes on minority stakes in family businesses by artificially inflating their value, and he’s drafted a bill to stop Treasury’s tax grab as a violation of the separation of powers.
In June Mr. Davidson won a special election to fill the seat of retired House Speaker John Boehner. The new Congressman tells us that since he’s “just on the gig three months,” he’s still working on the legislative strategy to block the Obama tax raid.
But it’s clear that his understanding of the underlying issue already exceeds that of anyone at the Obama Treasury—or the Clinton campaign. A former owner of several businesses, Mr. Davidson says the U.S. economy needs owners focused on “growing assets, not structuring them for life events.” He explains that many farms in particular may carry high values but hold little cash, and so the death tax triggers land sales to pay the IRS.
“The whole concept of a death tax is immoral,” Mr. Davidson says, and he’s right. The tax confiscates assets that have already been taxed once or more when first earned, and it punishes a lifetime of investment and thrift. The desire to pass along assets to heirs is also a motivation for many entrepreneurs. No one we know labors to turn two-thirds of a life’s work over to politicians to spend.
Mr. Trump has proposed to eliminate the death tax, and along with his other reforms (see nearby) the differences with Mrs. Clinton on taxes may be more stark than in any presidential race in decades.
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