There’s a new bill in the House taking aim at the wealthy.
It’s called the 99.8% Act, and its objective is to lower the estate tax exemption and increase the tax rate for some of the wealthiest taxpayers. Under the Act, the tax rates would be progressive, starting at 45% for estates valued at $3.5-$10 million, 50% for estates from $10-50 million, 55% for those valued between $50 million and $1 billion, and 77% for all estates over $1 billion.
Also threated by the Act are a variety of estate-planning strategies, including beefing up the generation-skipping transfer tax by applying it, with no exclusions, to any trust established to exist beyond 50 years. According to Rep. Jimmy Gomez (D-CA), the author of the bill, the Act is intended to “…take a progressive step forward in addressing our country’s rapidly increasing wealth inequality by strengthening the estate tax and ensuring the wealthiest among us pay their fair share.”
Among Democrats jockeying for the presidential nomination, income inequality has been a hot topic, and even some billionaires have conceded that they’re too darn rich. The Act is virtually identical to proposals made by Senator Bernie Sanders.
There are multiple Democratic co-sponsors in the House, as the Democrats have been eager to reverse a trend of gradually reducing the tax rate while increasing the estate tax deduction. Many of the Democratic presidential candidates are eager to expand the estate tax. Most certainly the Act will face strong opposition from Republics, who have tried repeatedly to completely repeal the estate tax, most recently when negotiating the 2017 Tax Cuts and Jobs Act.
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New House Bill Aims to Lower Exemption Amount | Wealth Management