Now that the GOP and Democratic conventions are over and the general election campaigns are in full swing, Americans will soon decide on a new president. Many political commentators have noted that the stark differences between the presidential candidates and their platforms have never been greater in any presidential election in modern American history. While most of the rhetoric this election cycle has focused on immigration, trade, and foreign policy, the candidates’ positions on death taxes (e.g., Federal estate, gift and generation skipping transfer taxes) vary greatly and have at times come under scrutiny from opposing parties.
The current estate tax exemption is $5.45M per individual or $10.9M for married couples. Both candidates, however, if they get their way with Congress, would make significant changes to our current death regime. Each candidate has their own detailed proposal for how they would like to approach the Death Tax. The Center for Federal Tax Policy has done a great job summarizing both candidates’ proposals on the death tax. Below is a summary.
The Republican nominee, Donald Trump, would eliminate the estate and gift tax altogether. Trump has not yet provided formal details on how he would implement a phase out or elimination of the estate and gift tax, but instead has stated in general how these taxes should be eliminated because they hurt business, etc.
The Democratic nominee, Hillary Clinton, has proposed to decrease the gift tax exemption to $1M and the estate tax exemption to $3.5M. In addition, Clinton would increase the top estate tax rate from 40% to 45% and eliminate any future increases in the exemption amounts due to inflation.
Whether you lean right or left or sit somewhere in the middle, elections have consequences and the conversation and future surrounding our federal death tax regime will be affected by which candidates win in November at the top of the ticket and on down the ballot.