According to an analysis from the Tax Foundation released earlier this year, you’re going to be in for a tax headache if Hillary Clinton is our next president. Her plan would attempt to raise taxes by roughly $500 billion over the next ten years, but would reduce economic activity enough to reduce the revenue actually collected down to around $200 billion. Because taxes disincentive economic activity, “the plan would reduce the size of gross domestic product (GDP) by 1 percent over the long term. This reduction in GDP would translate into 0.8 percent lower wages and 311,000 fewer full-time equivalent jobs.”
It’s been famously said that the only two things certain in life are death and taxes – and the former is even true in the event of the latter. As the Wall Street Journal reports: Democratic presidential candidate Hillary Clinton would levy a 65 percent tax on the largest estates and make it harder for wealthy people to pass appreciated assets to their heirs without paying taxes, expanding the list of tax increases she would impose on the top sliver of America’s affluent.
The figures provided by the WSJ indicate that her tax plan has gotten more liberal since the Tax Foundation analyzed it, adding: The estate-tax increase and other new proposals that Mrs. Clinton detailed on Thursday would generate $260 billion over the next decade, enough to pay for her plans to simplify small business taxes and expand the child tax credit, according to the nonpartisan Committee for a Responsible Federal Budget, which advocates fiscal restraint.
In all, Mrs. Clinton would increase taxes by about $1.5 trillion over the next decade, increasing federal revenue by about 4 percent, though that new burden would be concentrated on relatively few households. There is at least a $6 trillion gap between her plan and the tax cuts proposed by her Republican rival Donald Trump.
The Clinton campaign changed its previous plan, which called for a 45 percent top rate—by adding three new tax brackets and adopting the structure proposed by Sen. Bernie Sanders of Vermont during the Democratic primaries. She would impose a 50 percent rate that would apply to estates over $10 million a person, a 55 percent rate that starts at $50 million a person, and the top rate of 65 percent, which would affect only those with assets exceeding $500 million for a single person and $1 billion for married couples.
Donald Trump jumped on the news, arguing that it would cost her whatever support she once had from Republicans in the “Never Trump” crowd.
Hillary Clinton just lost every Republican she ever had, including Never Trump, all farmers & sm. biz, by saying she’ll tax estates at 65%.— Donald J. Trump (@realDonaldTrump) September 23, 2016
She’s promoted this plan with class-warfare rhetoric, but even she doesn’t want to pay it. As Breitbart reported: Hillary Clinton and her husband Bill have created a number of tax shelters in recent years to dramatically limit their payment of the very same tax. As Bloomberg reportedback in 2014: “To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth.”
In 2010 the Clinton created “residential trusts” and the following year moved their Chappaqua estate into the trust, according to their financial records. As David Scott Sloan, a partner at the firm Holland Knight explained the Clinton trust to CBS News, “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”
The move will save the Clintons hundreds of thousands of dollars in estate taxes, according to accountants quoted by Bloomberg.
Even more substantial, the Clintons created a life insurance trust in 2010, which will shelter life insurance payments from estate taxes. This is their second such trust. The first was created in 1996, according to financial disclosures.
As usual, while Hillary demonizes those sharing her economic status, she’s making sure the “punishment” applies to everyone except for herself.
[Note: This post was written by The Analytical Economist]