Hillary Clinton recently released a tax plan pledging a confiscatory tax rate of 65 percent on the estates of people who want to leave their life’s work to their families.
The plan is so aggressive that Donald Trump used his Twitter account to claim that Clinton had just lost the support of every farm family, small business owner and ‘Never Trumper.’
He’s partly right — the small-business sector and the farming sector are fierce opponents of estate taxes, partly because large tax bills can force families to sell their farms, businesses and restaurants.
House Majority Whip Steve Scalise (R-LA), for instance, recently said it is “morally wrong” to force families who just lost a loved one to face instantly losing their businesses as well. “That’s not supposed to be something people have to deal with when they’re grieving for the loss of a loved one,” he said according to The Hill newspaper.
Clinton released her plan to extract massive 65 percent of people’s hard-earned wealth under the headline “Investing in America by Restoring Basic Fairness to Our Tax Code.” That 65 percent levy would be combined with any local or state taxes and fees.
Forbes Magazine blasted Clinton’s plan.
Ms. Clinton previously called for whittling the $5.45 million figure down to $3.5 million, and upping the 40% tax rate to 45%. But those were modest hikes, and that was then. Now, with populist flair, she wants a 50%, 55%, and 65% rate. The 50% rate applies to estates worth over $10 million per person, 55% for estates over $50 million, and 65% for estates exceeding $500 million. The new proposed estate tax plan makes her prior 40% to 45% hike seem inconsequential.
The financial magazine went on to warn that Hillary’s new idea could “force sales of family companies, and sales of family farms and ranches” if it ever became law. Meaning a person who worked his whole life to build a business or toiled to create a farm won’t be able to leave it to his family without them having to sell it off to pay Hillary’s steep taxes.
Whatever the demerits of Hillary’s plan, it is a major departure from her husband’s tax ideas when he was president in the mid 1990s.
After his party was wiped out in the 1994 midterm elections, President Bill Clinton insisted that even he felt he raised taxes too much. In 1995 Clinton made what the media called “an offhand confession”
“Probably there are people in this room still mad at me at that budget because you think I raised your taxes too much. It might surprise you to know that I think I raised them too much, too,” Bill Clinton said at a fund raiser in Houston.
But this was far less an “offhand confession” than it was the first step in a re-election campaign built on a Reaganesque economic policy that set the economy booming again after it had begun to slow due to his bad tax policies during his first term.
But Hillary has not learned the lesson a disastrous tax hike taught her husband in the 1990s. Her plan would further hamper an economy already being strangled by President Barack Obama’s stifling regulations and tax policies.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com.
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