For decades, Democrats have been lockstep in their support for the government’s right to tax a dead individual’s estate. Several 2020 Democrat presidential candidates have already proposed increases in the death tax limit, and the campaign is only getting started.
Under current tax law, the death tax is 40 percent. Senator Bernie Sanders (I-Vt.) has proposed nearly doubling the tax to 77 percent in his new Estate Tax Plan, returning the death tax to levels unseen since the 1970s.
Unfortunately for taxpayers, Senator Sanders is not alone in his monomaniacal desire to raise taxes, as other 2020 Democrats have proposed similar increases. Senator Elizabeth Warren (D-Ma.) is advocating for a progressive death tax system, with the highest rate allowing the government to confiscate 75 percent of a dead individual’s estate. Senator Cory Booker (D-N.J.) is proposing a death tax rate of 65 percent, raising the death tax back to 2009 levels.
On top of the increased death tax, Warren has proposed a wealth tax and Rep. Alexandria Ocasio-Cortez (D-N.Y.) of New York has suggested a 70 percent marginal tax rate on income over $10 million.
By stark contrast, Republicans, including President Donald Trump, Senator John Thune (R-S.D.), and Representative Jason Smith (R-Mo.), are working hard to repeal death tax. In fact, Republicans, have proposed a bill to permanently and completely repeal the death tax, called the Death Tax Repeal Act of 2019.
Repeal of the death tax is good tax policy. The unseemly death tax is levied on assets that have been taxed previously through income taxes, capital gains taxes, dividend taxes, or the corporate income tax. Taking an additional 40 percent when an individual dies is double taxation.
The death tax disproportionately affects lower income land owners and increases incentives to hide assets. The wealthy can evade the tax through loopholes and armies of lawyers and accountants. Small, family run businesses, farmers, and ranchers cannot afford to seek out such loopholes, and are hit much harder than the powerful and well-connected.
Finally, public polling consistently shows that large majorities of the American people support death tax repeal. It is unsurprising but unfortunate that 2020 Democrats are actively subverting the will of the American people by advocating for massive death tax hikes.
For the sake of good policy and their future electoral prospects back in their home states, 2020 Democrats should work with President Trump and Congressional Republicans to kill the death tax once and for all.