|You might favor this bill if:
► You believe that the fairest way to reduce wealth inequality, invest in the middle class and preserve the democracy is to enact a progressive estate tax on the inherited wealth of multi-millionaires and billionaires. A tax system should ask the billionaire class to pay its fair share of taxes which in turn reduces the level of wealth inequality in America and creates an economy that works for the 99.8 percent and not for the wealthy and the powerful.
|You might oppose this bill if:
► You believe that the billionaire and multimillionaire class is already paying its fair share of tax income, this is just another scheme to soak the rich and collect more revenue from them. There should be no expansion on the estate tax, people should be able to accumulate wealth and redistribute it at will without fear at how high the level of the estate tax percentage is.
For the 99.8% Act is a bill that would greatly expand the estate tax, allowing the federal government to take up to 77 percent of a billionaire’s net worth after they die.
According to Senator Sanders, enacting a progressive estate tax on the inherited wealth of multi-millionaires and billionaires is the fairest way to reduce wealth inequality and preserve democracy.
This bill would only affect the wealthiest 0.2 percent of Americans who inherit more than $3.5 million.
This bill establishes a new developing estate tax structure which includes:
● 45% on an estate valued between $3.5 million and $10 million;
● 50% for an estate valued between $10 million and $50 million;
● 55% for an estate valued in excess of $50 million; and
● 77% for an estate valued in excess of $1 billion.
This bill strengthens generation-skipping tax which is used to avoid estate tax payments, by applying it with no omission to any trust set up to last more than 50 years.
In this bill, wealthy families have to pay income taxes on earnings generated by assets in “grantor trust”. This way, it will be difficult for them to avoid gifts taxes.
Donors are prevented from taking assets back from generation-skipping trusts just a couple of years after establishing them to avoid gift taxes. This is done to prevent abuses of grantor retained annuity trusts (GRATs).
The bill would limit the annual exclusion from the gift tax (which was meant to shield the normal giving done around holidays and birthdays from tax) for gifts made to trusts.
The bill would end tax breaks for dynasty trusts which allows a lot of wealthy families to avoid paying estate and gift taxes by making a one time transfer into a long-term trust fund.
Ending “tax breaks for dynasty trusts” isn’t the only thing that will be done by this bill, it’ll also close other possible loopholes in the estate and gift tax.
One of these loopholes has to do with “valuation discounts.” This is when restrictions are placed on interests in family businesses which are claimed, falsely to reduce the value of the estate.
If there’s a transfer in an entity other than an interest which is actively traded, the value of the non-business assets held by the entity with respect to the interest will be determined as if the assets were transferred directly. With this, no valuation discount shall be allowed with respect to such assets.
Another loophole involves claiming that the value of an inherited asset is lower, for estate tax purposes than what is claimed for income tax purposes to calculate profit when the asset is sold.
This bill not only goes after the extremely rich families, but it also protects farmland and conservation easements.
The bill would protect family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes, the bill would also increase the maximum exclusion for conservation easements to $2 million.
According to this legislation, the wealthiest families in America, made up of 588 families with a combined net worth of over $3 trillion, would owe up to $2.2 trillion in estate taxes.
Sen. Sanders aims to reduce the level of wealth inequality in America by taxing those who have inherited huge amounts of money while investing in the middle class, which is slowly disappearing.
Sponsored by: Senator Bernard Sanders [I-VT].
Cosponsored by: 0 Rep / 1 Dem.
Sponsored by: Sen. Murray, Patty [D-WA].
Cosponsored by: 0 Rep / 44 Dem / 2 Ind.