Last week Bernie Sanders released his tax increase plan for paying for his $1.4 trillion annual single payer health care plan. Among other hefty increases, his plan would increase the estate tax on the “wealthiest .3% of Americans who inherit more than $3.5 million” to raise an additional $21 billion annually.
The specifics are lacking, but the plan resembles President Obama’s annual budget proposals which call for the same reduction in the estate tax exemption to $3.5 million from the current $5.45 million, an increase in the estate tax rate from 40% to 45%, and no indexing of the exemption amount to inflation.
Two quick points:
1. As an estate planner who lived through 12 years of uncertainty with the estate tax exemption, it is disappointing to see politicians inject uncertainty back into the estate planning arena which makes planning difficult for clients and their families.
2. A plan that equals 40% of the current federal budget does not have enough rich people to gouge to pay for it so of course Sanders has to resort to taxing the dead more to try to pay for it.