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  • 2016-10-01 (xsd:date)
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  • Hillary Clinton Targets Family Farms with 65% Estate Tax? (en)
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  • The social media post above stating that a so-called 65% death tax proposed by Democratic presidential nominee Hillary Clinton would take farms from families echoes a claim made by Clinton's GOP rival, Donald Trump, in a 28 September 2016 stump speech in Council Bluffs, Iowa: By way of comparison, Trump would repeal the estate tax altogether. The 65% figure cited in both instances comes from a set of tax reform proposals outlined on Clinton's campaign web site covering topics ranging from closing tax loopholes to imposing a risk fee on the largest financial institutions to implementing the so-called Buffet Rule requiring millionaires pay at least a 30% effective tax rate. The basics of Clinton's estate tax proposal are as follows: As you can see, Clinton is indeed calling for a 65% tax rate, but this only applies to the largest estates — those valued at more than $1 billion per couple. That would probably include very few, if any, family farms. That said, there's more to Clinton's proposal than slapping a 65% tax on the wealthiest estates. It would also lower the threshold for taxable estates from the existing $5.45 million in worth per individual ($10.9 million per couple) to $3.5 million per individual ($7 million per couple). It would raise the minimum tax rate on the smallest estates — currently at 40% — to 45%, and it would increase incrementally from there: 50% on the value of estates over $10 million ($20 million per couple), 55% on estates over $50 million ($100 million per couple), and, as already stated, 65% on estates over $500 million ($1 billion per couple). This means that even though the 65% figure people are raising alarms about probably wouldn't affect family farms at all, other provisions in Clinton's tax plan might. It would certainly be the case, for example, that inherited estates valued at between $7 million and $10 million per couple — which wouldn't have been taxable before — would thereafter be taxed at the rate of 45 percent. (A critical point to understand in calculating the effects of the estate tax is that it's only levied on the portion of an estate's value over a given threshold — e.g., an inherited estate valued at $8 million would be taxed at the 45% rate, but only on the value exceeding the $7 million threshold: $1 million. The first $7 million would not be subject to the tax.) More details about the economic proposals of both major candidates can be found at crfb.org, the web site of the Committee for a Responsible Federal Budget. (en)
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