Hillary Clinton Proposes 65% Estate Tax

Hillary Clinton took Senator Bernie Sanders' lead by proposing a change to the estate tax rules that would add three new tax bracket on the largest estates.  Under her proposal, a 50% rate would apply at estates over $10 million per person, a 55% rate on estates over $50 million per person, and a top rate of 65% imposed on estates exceeding $500 million per person.  Admittedly, this increase will affect a tiny number of Americans.

However, Hilliary Clinton has also proposed to repeal the step-up in basis rule that allows appreciated assets to have their costs basis increased at the death of the owner--which has the effect of substantially reducing capital gains tax when those assets are sold. Thus, a repeal of the step-up basis rules would increase income taxes on estates and heirs substantially.