(Bloomberg) — Democratic presidential candidate Hillary Clinton’s call Tuesday to increase taxes on the wealthy and close “loopholes” didn’t address the candidate’s own moves to shield at least part of the value of her New York home from the estate tax.
Bloomberg News reported in 2014 that Hillary and Bill Clinton created residence trusts in 2010 and shifted ownership of their Chappaqua, New York, house into them in 2011, according to federal financial disclosures and local property records. Such trusts offer tax advantages, in which any increase in the house’s value can be excluded from the Clinton’s taxable estate. The trusts could save the couple hundreds of thousands of dollars in future estate taxes, a tax specialist told Bloomberg News in 2014.
The trusts, as well as the “loopholes” she proposed closing in other areas on Tuesday, are legal under current tax rules. Brian Fallon, a Hillary Clinton spokesman, said, “Their tax rate was over 35 percent in 2013, and she is proposing policies that would raise their taxes further.”
The minimum value of the Clintons’ financial assets is $11 million, according to Hillary Clinton’s most recent campaign disclosure, which requires reporting within broad ranges of value. The couple has earned at least $30 million since January 2014, according to the disclosure.
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That income places them among the top .01 percent of American taxpayers, based on Internal Revenue Service data. Campaign disclosures show that the Clintons also own life insurance trusts, which can also reduce estate-tax bills.
Under current law, estates worth less than $5.45 million per person, or $10.9 million per married couple, are exempt from the 40 percent estate tax. Clinton on Tuesday proposed making more estates taxable — those worth more than $3.5 million per person or $7 million per couple. She also wants to raise the rate to 45 percent.
The increased tax would apply to four out of every 1,000 estates in the country and raise $200 billion over 10 years, according to a Clinton campaign aide who asked not to be named.
On Monday, Clinton proposed creating a 4 percent tax surcharge for people with annual incomes of $5 million or more, a measure that would target just .02 percent of U.S. taxpayers and raise $150 billion over 10 years, the aide said. Clinton also said Tuesday she wants to close “loopholes” that create tax benefits for hedge-fund managers and the wealthy.