Sen. Bernie Sanders, I-Vt., introduced legislation today to establish a progressive estate tax on the fortunes of the top 0.2 percent of Americans and significantly increase rates on billionaires.
Sanders said his legislation, the For the 99.8% Act, would raise $2.2 trillion from the nation’s 588 billionaires. The proposal comes two days after Senate Republican leadership proposed a bill to repeal the estate tax.
“At a time of massive wealth and income inequality, when the three richest Americans own more wealth than 160 million Americans, it is literally beyond belief that the Republican leadership wants to provide hundreds of billions of dollars in tax breaks to the top 0.2 percent,” Sanders said. “Our bill does what the American people want by substantially increasing the estate tax on the wealthiest families in this country and dramatically reducing wealth inequality.”
Sanders’ bill would only apply to the wealthiest 0.2 percent of Americans. It would establish a 45 percent tax on the value of an estate between $3.5 million and $10 million; a 50 percent tax on the value of an estate between $10 million and $50 million; a 55 percent tax on the value of an estate in excess of $50 million; and a 77 percent tax on the value of an estate above $1 billion – a return to the top rate from 1941 through 1976.
Good For Life Insurance
The life insurance industry receives a good amount of business from the estate tax, LIMRA found in a 2017 survey.
Survivorship life insurance is intended to pay federal estate taxes and other estate-settlement costs owed after both spouses pass away. It represents approximately 4 percent of the life insurance market and 10 percent of premium for companies who offer it annually, LIMRA found.
Sen. John Thune, R-S.D., introduced the Death Tax Repeal Act earlier this week. It would repeal the federal estate tax and the generation-skipping transfer tax.
It would make permanent a maximum 35 percent gift tax rate and the lifetime gift-tax exemption, indexed for inflation. It would maintain the stepped-up basis rule under current law.
Sanders said his bill would close tax loopholes that have allowed billionaire families to pass fortunes from one generation to the next without paying taxes.
The Walton family, the wealthiest family in America, would get up to a $63 billion tax break from the Republican proposal, Sanders said, while they would owe an estate tax of up to $130 billion under his proposal.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected] Follow him on Twitter @INNJohnH.
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