President Joe Biden and mem- bers of Congress “are already foreshadowing personal, trustand estate tax increases in the coming months,” according to AllisonHutchinson, managing director andresident tax expert at Brown BrothersHarriman.
Where these proposals end up, however, is negotiable.
As Biden noted in early April in
unveiling his comprehensive propos-
al, The Made in America Tax Plan, to
increase investment in infrastructure
by, in part, boosting the corporate tax
rate: “Debate is welcome. Compromise
is inevitable. Changes are certain.”
While it appears that a wealth tax
as put forth by Sen. Elizabeth Warren,
D-Mass., “is off the table,” Hutchinson
told Investment Advisor in early April,
“changes to the way the income tax basis
of assets are taxed (or not taxed) at death,
as well as increases to personal income
tax rates on wealthy individuals and
changes to the taxation of estates and
trusts, are all very much on the table.”
Sen. Bernie Sanders, I-Vt., released in
late March the For the 99.5% Act, legis-
lation that would restore the estate tax
exemptions to the 2009 thresholds of $3.5
million per individual and $7 million per
married couple from the current exemp-
tions of $11.7 million and $23.4 million.
In a shift, larger estates would be subject to higher tax rates. The current 40%tax rate would be raised to 45%. Taxableestates greater than $10 million would betaxed at 50%, amounts greater than $50million at 55%, and amounts greater than$1 billion would be taxed at 65%, according to the Joint Committee on Taxation.
The same rates would apply for gifttaxes, for which the threshold would belowered to $1 million.
“Introduction of this legislation is a bigstep forward to significantly strengthening the estate tax,” Frank Clemente,executive director of Americans for TaxFairness, said in a statement.
During an early April Senate BudgetCommittee hearing, titled “Ending aRigged Tax Code: The Need to Makethe Wealthiest People and LargestCorporations Pay Their Fair Share ofTaxes,” Sanders said that his bill would“demand that the families of the millionaire class not only not get a tax breakbut start paying their fair share of taxes.”
Sanders also introduced the same daythe Corporate Offshore Tax DodgingPrevention Act, “legislation that wouldprevent corporations from shifting theirprofits offshore to avoid paying U.S.taxes and would restore the top corporate rate to 35%, where it was before[Donald] Trump became president.”
Hutchinson noted that “It may be easier for interested parties to negotiatefor changes to the estate/gift tax rate(currently 40%), or the exemption fromestate/gift tax (currently $11.7 million),where they have a number to debate. Thepolicy negotiations around changes to
WASHINGTON WATCHBy Melanie Waddell
Experts Predict Which Tax
Hikes Are Most Likely
Tax measures floated by President Biden andlawmakers prompt a hot debate.