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Hillary: Know what? We should raise the death tax as high as 65 percent
Three brackets, all higher than the current 45 percent.
We've discussed the death tax a fair amount around here, and for better or for worse it usually breaks down to two arguments. Defenders of the tax say there's no reason the children of rich people should feel entitled to get all their parents' money, since they themselves did nothing to earn it. Critics of the tax respond by saying that if the parent earned the money, then it should be the parents' decision who gets it, and at any rate there's no particular reason the government should have a claim on it.
Did the government earn any of it?
Obviously not, but you know how liberals think. They believe that if any dollar is allowed to be in private-sector circulation and not in the hands of politicians, there had better be a darn good reason for it! Surely government would do more good with that dollar than anyone in the private sector would, particularly people connected to the person who actually earned it (and oh, by the way, already paid taxes on it).
And you know how Hillary thinks, so if she becomes president, expect to see that much more private-sector capital sucked up by Washington. Not just as you're earning it, but when you die too. And if you happen to do very well in life and amass an estate worth $1 billion or more, well, you need to punished. Or more accurately, your heirs do:
Democratic presidential nominee Hillary Clinton proposed on Thursday to tax the estates of ultra-rich Americans at a rate as high as 65 percent — a plan that would apply to only a handful of billionaire families, and which comes straight from the campaign playbook of Clinton's former rival, Sen. Bernie Sanders of Vermont.
Clinton had already proposed to raise estate tax rates on some millionaires to 45 percent. Her new plan goes further. It would add three new brackets: a 50 percent rate for couples with estates valued above $10 million, a 55 percent rate for couples with estates above $50 million and a 65 percent rate for those with estates above $1 billion. Republican nominee Donald Trump has called for the elimination of the estate tax entirely.
Internal Revenue Service data suggest Clinton's highest rates would apply to very few Americans. In 2014, there were only 223 estate-tax payers with reported estates valued at $50 million or more. Still, the plan drew immediate protests from conservatives, including the Trump campaign, which labeled it an "even more dramatic hike in the death tax."
Politically, the proposal could serve a dual purpose for Clinton. It would raise more revenue for the federal government and helps her make the case that she has proposed sufficient tax increases to offset all her proposed spending programs. It also could help her court former backers of Sanders, particularly young liberals who have been slower to embrace her candidacy after she defeated him for the nomination.
Now of course, everything Hillary does is political, and her calculation here is that she can please lots of liberal voters by vowing to stick it to a relatively tiny group of people, none of whom are likely to be said young liberals. This is classic liberal thinking: If the politicians aren't coming for you personally, what do you care?
Of course, anyone who knows anything about economics will care. The estate tax already sucks $275 billion out of the private economy every year. That's roughly 2 percent of the nation's entire gross domestic product, and it's money that could otherwise be invested into growing businesses, new product development, someone's education . . . it's not an insignificant thing when the government snatches capital out of the productive sector. GDP has been growing at an annualized rate of less than 2 percent throughout the Obama presidency, and much of the reason for this is that the federal government keeps confiscating capital from people who could be investing it in productive endeavors.
You might believe that the heirs of a billionaire "can afford it," but that's not the point. The better question is a) who would make more productive use of that money, politicians or the heirs?; and b) why does the government think that just because someone "can afford" to give it money, that gives it the right to take it?
Then again, that's a silly question to ask when you're talking about Hillary Clinton because she's a thief.