While we’re still about a month away from the IRS’ release of the 2015 inflation-adjusted federal estate tax exemption, Michael Rudegeair over at the Fiduciary Income Tax blog has projected that the 2015 exemption will be $5,420,000. This is an $80,000 increase over the 2014 exemption of $5,340,000 and a $420,000 increase in the exemption since 2011. (Update: The exemption was increased to $5,430,000 in 2015: IRS Releases 2015 Estate Tax Exemption and Other Related Inflation Adjustments.)
Meanwhile, just last week Socialist Senator Bernie Sanders (VT) laid out his plan for a “progressive estate tax on multi-millionaires and billionaires” in a Huffington Post blog as follows:
- Call for a progressive estate tax rate structure so that the super wealthy pay their fair share of taxes. The tax rate for the value of an estate above $3.5 million and below $10 million would be 40 percent. The tax rate on the value of estates above $10 million and below $50 million would be 50 percent, and the tax rate on the value of estates above $50 million would be 55 percent.
- Include a billionaire’s surtax of 10 percent. This surtax on the value of estates worth more than $1 billion would currently apply to fewer than 500 of the wealthiest families in America worth more than $2 trillion.
- Close estate tax loopholes that have allowed the wealthy to avoid billions in estate taxes. Some of the wealthiest Americans in this country have exploited loopholes in the tax code to avoid paying an estimated $100 billion in estate taxes since 2000. My bill would close those loopholes.
- Exempt the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009. Under this legislation, 99.75 percent of Americans would not pay a penny in estate taxes.
According to Senator Sanders, “A progressive estate tax on multi-millionaires and billionaires is the fairest way to reduce wealth inequality, lower our $17 trillion national debt and raise the resources we need for investments in infrastructure, education and other neglected national priorities.”
The senator plans to introduce legislation as outlined above very soon. My prediction about the percentage chance that his progressive estate tax proposal will become law: 0%.
- Read Senator Sanders Huffington Post blog: A Progressive Estate Tax
- Increased Estate Tax Exemption for 2015
- Overview of Current Federal Estate Tax Laws
- Recent Wealth Transfer Developments – Prof. Pennell’s Views
- Death Tax Repeal Act – Like a Broken Record
- What is the Future of the Federal Estate Tax?
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