In a new twist on the political stalemate over the future of the now lapsed estate tax, three of the Senate's most liberal members are calling for a 10% estate "billionaire's surtax" which would raise the levy on their estates to 65%. The tax would apply to estates above $500 million, which Sens. Bernard Sanders (I-Vt.), Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.) say would allow each couple to pass $1 billion on to heirs without facing the surtax.
Sanders, Harkin and Whitehouse say that under their new counterproposal, 99.7% of families would pay no estate tax. They would exempt $3.5 million per estate ($7 million per couple) from any estate tax and levy a rate of 45% above that, the same as in 2009. Moreover, family farms would be allowed to exclude an additional $3 million in value per estate. But the liberals would also add higher rates that didn't exist last year. The value of estates between $10 million and $50 million would be taxed at 50%, while assets up to $500 million would face a 55% tax. Then the billionaire's surtax would kick in.
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