Populist politicians have long targeted the rich.
Sometimes, they have a point and right now, income inequality in the US seems a reasonable concern to address. In politics, though, the unlikely often grabs the spotlight, while the real work – or danger, perhaps – lurks quietly offstage.
The Democrats have pitched several proposals they say would redress the injustices of income inequality. Bernie Sanders wants a wealth tax applied to America’s richest households, around 180,000 of them, according to his bill. He hopes to raise an extra $4.4 trillion or so over ten years – around the size of the 2019 federal budget. It sounds like a lot, but everything depends on how well spending is reined in over the coming years. Historical evidence suggests caution.
Whatever the details of this plan or that, what are the chances of Congress enacting a wealth tax? We rate them as slim – not with the Republicans dominant and the public untrusting of major, debatable initiatives.
A likelier scenario would involve boosting the estate tax. Currently, you’ve got to be Croesus-rich to feel its lash. For this very reason, a change in policy is far more conceivable – the estate tax is old as boots and harms no one apart from those greedy heirs. Well, that’s just how easy it would be to sell it.
Let’s hear from the honorable Mr. Sanders again. His proposed legislation suggests reducing the estate tax exemption to $3.9 million, where it stood before the 2017 tax reform (the current exemption is a heady and handy $11.4 million). He’d also like to raise the overall rates and apply a sliding scale that would rise in tandem with the estate’s value. Advisers and their wealthier clients should stay tuned for future congressional broadcasts.
For more information, please read:
Why The Rich Need To Plan For A Tougher Estate Tax, Not A Wealth Tax | Forbes