Democratic presidential nominee Hillary Clinton today on September 22, 2016, updated her campaign materials to reflect an increase in estate taxes over what she previously proposed, including up to a 65% rate on estates worth $500 million ($1 billion for couples), and her intention to limit the tax benefits of like-kind exchanges that she said are used to prevent capital gains taxation on certain sales.

Clinton's previous position on the estate tax was a return to the 2009 regime of a $3.5 million exemption and 45% rate. This position has been updated to match what Senator Bernie Sanders (I-VT) proposed during his presidential campaign. A previously released Clinton fact sheet on "Investing in America by Restoring Fairness to Our Tax Code" — which continues to repeatedly reference a desire to dismantle the "private tax system" for the wealthy — was updated to reflect her desire "to go further than that for estates valued in the tens and hundreds of millions, with higher rates as values rise, up to a 65% rate on estates valued at over $1 billion per couple." The Committee for a Responsible Federal Budget (CRFB), which first detailed the new proposals, said Clinton adopted the Sanders proposal of a 50% rate on estates between $10 million-$50 million, 55% rates for estates in excess of $50 million, then the top rate of 65%.

The updated document also reflects Clinton's intention to eliminate the "step up in basis" that allows accumulated capital gains to go untaxed when assets are passed on to heirs, and to treat bequests as a realization event. The document said her proposal will "include exemptions to ensure this change only affects the high-income families who by far benefit the most from this loophole, and protects middle-class families;" and "contain careful protections and flexibility for small and closely-held businesses, farms and homes, and personal property and family heirlooms."

The document also reflects Clinton's intention to "rationalize the Affordable Care Act's net investment income tax to prevent gaming by high-income taxpayers."

CRFB said the estate tax changes would add roughly $75 billion to the $160 billion estimated to be raised over 10 years from reverting back to the 2009 regime; the step up in basis proposal would raise $150 billion over 10 years; and limiting deferral on like-kind exchanges $35 billion over 10 years.

The updated fact sheet is attached.

———————————————
ATTACHMENT

Fact sheet