Death Tax for thee, but not for me.
Hillary Clinton has always pushed for a steep Death Tax on the American people. But when it comes to her own finances, it is a different story. Clinton’s newly released tax returns show she still uses tax avoidance strategies to shield her Death Tax liability.
According to a 2014 report by Bloomberg News, the Clintons created trusts in 2010 and shifted ownership of their New York home to it in 2011. In doing so, they will avoid paying hundreds of thousands of dollars in future death taxes.
As Bloomberg reports:
To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.
The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.
But Hillary Clinton’s official campaign website, in calling for a steep Death Tax hike, scolds:
She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are.
Oh! Let’s go back to the Bloomberg article:
Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.
“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”
Clinton said that “the estate tax has been historically part of our very fundamental belief that we should have a meritocracy.”
The newly released Clinton tax return shows the continued use of an Article 4 Trust, as shown on Schedule E, page 2.
While Clinton is all too happy to use tax avoidance mechanisms, as a senator she voted against repealing the Death Tax and even voted against giving small businesses and families a higher level of Death Tax exemption:
- In 2001, Clinton voted no on H.R. 1836, “the Economic Growth and Tax Reconciliation Act,” which contained a series of tax cuts, one of which increased the Death Tax exemption level to $3.5 million.
- In 2005, Clinton voted no on H.R. 8, “the Death Tax Repeal Permanency Act of 2005,” which fully repealed the Death Tax.
- In 2006, Clinton voted no on H.R. 5970, “the Estate Tax and Extension of Tax Relief Act of 2006,” which increased the Death Tax exemption level to $5 million.
- In 2008, Clinton voted no on S.Amdt.4191, legislation to increase the Death Tax exemption level to $5 million.
If Clinton truly believes the Death Tax is about the “fundamental belief that we should have a meritocracy,” she should put her money where her mouth is and pay up.
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