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What are the Presidential Candidates'
Positions on Estate Taxes?
With the Presidential race in full swing and Super Tuesday tomorrow, it's interesting to take a look at the candidates' positions on a subject near and dear to our hearts, estate taxes!
Here's the latest from The Tax Foundation, an independent tax policy research group.
*These proposals are only for the FEDERAL estate tax, which currently has a $5.45 million cutoff (and is doubled to $10.9 million for married couples). None of these potential estate tax changes would impact the MA state estate tax, which has only a $1 million threshold (and if over $1 million, the entire estate is taxed at 6-16% unless certain trusts are in place).
Hillary Clinton
- Would increase the top estate tax rate to 45%; lower the tax exclusion rate to $3.5 million - Would also raise rates on medium term capital gains (investments held less than 6 months) to between 24-39.6%; proposes a 4% surtax on income over $5m; tax on high frequency financial transactions; tax carried interest at ordinary income rates Bernie Sanders
- Increase the estate tax to 65%; lower the estate tax exclusion to $3.5 million
- Would also tax capital gains and dividend income at ordinary income rates for households with incomes over $250,000; institute a financial transactions tax; tax carried interest at ordinary income rates, off-setting credit for low income Americans
Ted Cruz - Repeal both the estate and gift tax *
- Would also lower rates on capital gains and dividend income to 10%
John Kasich
- Repeal estate tax *; no position on gift tax
- Would also lower the rate on long term capital gains to 15%
Marco Rubio
- Repeal estate tax *
- Would also eliminate taxes on capital gains and dividend income
Donald Trump- Repeal the estate and gift tax *
- Would also set the top capital gain rate at 20%; eliminate the net investment income surtax; tax carried interest at ordinary interest income rates Ben Carson
- Repeal both the estate and gift tax *
- Would also eliminate taxes on capital gains and investment income
* As good as repealing the federal estate tax may sound, it would only apply to estates over $5.45 million ($10.9 million if married). And doing away with the estate tax also does away with the "stepped-up basis" (valuing inherited assets at the date of death value for capital gains purposes), which would substantially increase capital gains taxes for inherited assets.
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