Sanders offers estate tax bill topping out at 77 percent

Sanders offers estate tax bill topping out at 77 percent
© Stefani Reynolds

Sen. Bernie SandersBernie SandersTrump, Biden will not shake hands at first debate due to COVID-19 Sanders tells Maher 'there will be a number of plans' to remove Trump if he loses Sirota reacts to report of harassment, doxing by Harris supporters MORE (I-Vt.), who is mulling a 2020 Democratic presidential bid, offered a bill on Thursday to expand the estate tax as progressive lawmakers discuss ways to increase taxes on the wealthy.

"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 said in a statement. "From a moral, economic, and political perspective our nation will not thrive when so few have so much and so many have so little."

Sanders introduced the legislation a few days after a number of Senate Republicans offered a bill to repeal the estate tax — a move the Vermont senator criticized, saying "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."


The legislation also comes as prominent progressives, including Democratic presidential hopefuls, float new proposals to raise taxes on the very wealthy. Sen. Elizabeth WarrenElizabeth WarrenOvernight Defense: Appeals court revives House lawsuit against military funding for border wall | Dems push for limits on transferring military gear to police | Lawmakers ask for IG probe into Pentagon's use of COVID-19 funds On The Money: Half of states deplete funds for Trump's 0 unemployment expansion | EU appealing ruling in Apple tax case | House Democrats include more aid for airlines in coronavirus package Warren, Khanna request IG investigation into Pentagon's use of coronavirus funds MORE (D-Mass.), who has announced a presidential exploratory committee, proposed a new annual "wealth tax" last week.

The tax-cut law that President TrumpDonald John TrumpBiden says voters should choose who nominates Supreme Court justice Trump, Biden will not shake hands at first debate due to COVID-19 Pelosi: Trump Supreme Court pick 'threatens' Affordable Care Act MORE signed in December 2017 significantly increased the amount of money exempt from the estate tax, but did not eliminate it completely. For 2019, the estate tax applies to the value of estates worth more than $11.4 million for an individual. Amounts above the exemption level are taxed at a rate of 40 percent under current law.

Sanders's bill would lower the exemption amount for the estate tax and also create a progressive rate structure. The rate would be 45 percent for the value of an estate between $3.5-10 million, 50 percent for the value of an estate between $10-50 million, 55 percent on the value of an estate between $50 million and $1 billion, and 77 percent on the value of an estate that exceeds $1 billion.

Sanders's office said in a summary of the bill that the top estate tax rate had previously been 77 percent from 1941 to 1976.

The bill also includes provisions designed to take aim at strategies that wealthy people employ in an effort to minimize their estate tax bills, including curbing tax breaks for trusts and ending "loopholes" relating to valuation discounts, according to Sanders's office.

Additionally, the bill would allow family farmers to lower the value of their land by up to $3 million for estate tax purposes. Republicans and business groups often argue that the estate tax is harmful to family farmers, though few estates with small farms have paid the tax in recent years.

Sanders's office said that the families of America's billionaires combined would owe up to $2.2 trillion in estate taxes under the senator's bill. The senator's office estimated, using net worth figures from Forbes, that Trump would owe $2.16 billion.

Sanders floated a similar expansion of the estate tax during his 2016 presidential campaign, but at the time he proposed a top rate of 65 percent for billionaires. Hillary ClintonHillary Diane Rodham ClintonThe Memo: Trump furor stokes fears of unrest Bloomberg rolls out M ad buy to boost Biden in Florida Hillicon Valley: Productivity, fatigue, cybersecurity emerge as top concerns amid pandemic | Facebook critics launch alternative oversight board | Google to temporarily bar election ads after polls close MORE had a similar estate-tax proposal to Sanders, while Trump called for full repeal of the tax.

Polling has consistently shown that voters want the wealthy to be taxed more, but surveys from as recently as a few years ago have found the estate tax to be unpopular. A 2016 Gallup poll found that 54 percent of Americans supported proposals to eliminate the estate tax.