Under the current rule, estates worth more than $5.45m pay 40% tax, although Clinton has previously championed lowering the threshold to $3.5m as well as upping the tax rate to 45%.
However, last week the presidential hopeful revealed plans to introduce 50% tax rate for couples with estates valued above $10m, 55% for couples with estates above $50m and the 65% rate for a single person with property worth more than $500m along with any couple with an estate above $1bn.
Wooing Sanders’ supporters
According to commentators, the policy, which has been lambasted by Republican opponents as the “death tax”, is part of a wider move to attract Sanders’ backers, who have been slow to embrace Clinton since she defeated him for the Democratic nomination.
Proceeds from the tax hike will be used to fund proposed benefits for middle-class people, such as expanding a tax credit for working parents, said Clinton’s camp.
"Secretary Clinton understands that it is appropriate to ask the top three-tenths of 1%, the very wealthiest people in this country, to pay their fair share of taxes."
In a statement last week, Sanders said, “Secretary Clinton understands that it is appropriate to ask the top three-tenths of 1%, the very wealthiest people in this country, to pay their fair share of taxes so we can provide a Child Tax Credit for millions of working families and lower taxes for small businesses. Under this proposal, 99.7% of Americans would not pay a nickel more in taxes.”
Clinton’s campaign also said the estate tax hike, which will be the highest since the 1980s, would only hit the wealthiest people, with Internal Revenue Service (IRS) data from 2014 suggesting there were only 223 estate-tax payers with reported estates valued at $50m or more.
The higher estate tax will coincide with the Sensible Estate Tax Act of 2016, which will slash the estate tax exemption to $3.5m and raise the tax rate to 45%.
Moreover, President Obama has long since campaigned for a change in the rules taxing capital gains associated with inherited assets aimed at closing a huge loophole around basis step up. If implemented, the initiatives would together raise $260bn in revenue over a decade.
Unsurprisingly, Republican presidential nominee Donald Trump, a real estate developer who according to Forbes magazine is worth $4.5bn, wants to eliminate the estate tax altogether.
The latest polls from the US election, due to be take place 8 November 2016, show the race is the closest it has been since June, with Hillary Clinton just 1.4% ahead of rival Donal Trump, with Clinton on 44.5% to Trump’s 43.1%.
According to the most recent IPSOS Mori poll both candidates are on 39% – with 22% undecided or planning to vote for other candidates.