Independent Senator and former U.S. presidential candidate Bernie Sanders is proposing to expand the estate tax on wealthy Americans, including a rate of up to 77 percent of the value of estates of more than $1 billion.
Sanders, who is mulling a second run for president, said in a statement that his plan would affect 0.2 percent of Americans. It would set a 45 percent tax on the value of estates between $3.5 million and $10 million, increasing gradually to 77 percent for estates amounting to more than $1 billion. The current estate tax kicks in when an estate is worth about $11 million.
Bloomberg News Services estimates that Sanders’ proposal would generate up to $2.2 trillion in estate taxes from the families of all 588 billionaires in the U.S. with a combined net worth of more than $3 trillion, according to a summary of the plan.
The announcement from Sanders comes as other potential Democratic candidates are generating tax ideas that they intend to reduce income inequality. Senator Elizabeth Warren of Massachusetts has proposed an annual 2 percent tax on households worth more than $50 million. Sanders, who ran in the Democratic primaries against Hillary Clinton in 2016, hasn’t yet decided whether he’ll run in 2020.
Bloomberg reports the estate tax exemption was $3.5 million as recently as 2009. The 2017 Republican tax overhaul increased the exemption to $11 million through 2025, and some Senate Republicans are renewing an effort to repeal the tax entirely.
But more voters appear more receptive to the concept of increasing taxes on the wealthy. First-term Democratic U.S. Rep Alexandria Ocasio-Cortez of New York has proposed a 70 percent top tax rate on incomes of $10 million or more.
That concept was supported by 59 percent of respondents in a Hill-HarrisX poll conducted earlier this month.
What are your thoughts on this concept of taxing the rich more heavily in order to help the rest of the taxpayers?