Sanders proposes estate tax of up to 77% on billionaires

Jan 31, 2019 @ 2:08 pm

By Bloomberg News

Independent Sen. Bernie Sanders is proposing to expand the estate tax on wealthy Americans, including a rate of up to 77% on the value of estates above $1 billion.

The Vermont senator, who is considering a second run for president, said in a statement his plan would apply to the wealthiest 0.2% of Americans. It would set a 45% tax on the value of estates between $3.5 million and $10 million, increasing gradually to 77% for amounts more than $1 billion. The current estate tax kicks in when an estate is worth about $11 million.

The legislation would raise up to $2.2 trillion in estate taxes from the families of all 588 billionaires in the U.S. with a combined net worth of more than $3 trillion, according to a summary of the plan.

Mr. Sanders's plan comes as potential Democratic challengers to President Donald J. Trump eye progressive tax ideas intended to reduce income inequality. Sen. Elizabeth Warren of Massachusetts has proposed an annual 2% tax on households worth more than $50 million. Mr. Sanders, who ran in the Democratic primaries against Hillary Clinton in 2016, hasn't yet said whether he'll run in 2020.

The estate tax exemption was $3.5 million as recently as 2009. The 2017 GOP tax overhaul increased the exemption to $11 million through 2025, and some Senate Republicans are renewing an effort to repeal the tax entirely.

While Mr. Sanders and Ms. Warren represent one approach to reducing income inequality — breaking up concentrations of wealth among top earners — other Democratic candidates are directing legislation toward the lowest income brackets.

Sen. Kamala Harris, a California Democrat who launched her presidential campaign this week, introduced legislation this month to create a $3,000 refundable tax credit for low-income individuals. The bill includes nonbinding language that proposes funding the tax credit by repealing parts of the 2018 Republican tax cut and assessing a fee on large financial institutions.

Polls show that voters are becoming more receptive to the idea of increasing taxes on the wealthy. Freshman Democratic Rep. Alexandria Ocasio-Cortez of New York floated a 70% top tax rate on incomes of $10 million or more, an idea that 59% of people supported in a Hill–HarrisX poll conducted Jan. 12-13.

(More: Real estate moguls win as smaller investors are denied tax break)


What do you think?

View comments

Recommended for you

Featured video


How are broker-dealers helping 401(k) advisers adapt to a changing market?

Bryan Hodgens, co-head of LPL Financial's Retirement Partners group, says the industry is getting much better at connecting advisers to wealth management opportunities and helping scale their businesses.

Latest news & opinion

IBD report: Another impressive year

Despite a stock market decline, revenue is up. And the streak isn't expected to end anytime soon.

IBDs with the most CFPs

How many of the more than 83,000 certified financial planners are employed by the big independent broker-dealers?

Richard Thaler wants to use 401(k)s to boost Social Security payments

The Nobel laureate wants to simplify drawing down retirement assets, which he thinks is 'way harder' than saving the money.

InvestmentNews announces 2019 Innovation Awards winners

Sheryl Garrett is this year's InvestmentNews Icon.

Morgan Stanley rides wealth management train to solid first quarter

Chairman and CEO James Gorman expresses excitement about expanding into workplace plans with purchase of Solium.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print