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May 07, 2019 at 12:47 AM
Robert Bloink and William H. Byrnes
As the Democratic primary season begins to take shape, Bernie Sanders has once again emerged as a key possibility for the Democratic presidential nomination for 2020. Sanders, as in 2016, has proposed dramatic changes to various aspects of the existing tax system.
The Sanders proposal would create significant changes in the current estate and transfer tax system, creating concerns for higher income taxpayers who have come to rely upon the relative high estate tax exemption that has been in place for most of the decade. Sanders’ proposal would reduce the exemption from its current $11.4 million per person all the way down to the levels that existed in 2009—a mere $3.5 million per person—as well as impose increases to the estate tax rate itself.
We asked Professors Robert Bloink and William Byrnes, who write for ALM’s Tax Facts and hold opposing political views, to share their opinions as to both the viability and potential impact of Sanders’ estate tax plan should he or a similarly-minded Democrat reach the White House.
Their Votes:
Bloink
Byrnes
Their Reasons:
Below is a summary of the debate that ensued between the two professors.
Bloink: I’m all for this type of plan, although I think it’s far too soon to tell whether Sanders has a fighting chance at the presidency despite his general popularity. Sanders’ estate tax proposal focuses on taxing the super-rich taxpayers who would otherwise be engaging in drastic estate planning techniques to avoid transfer taxes entirely and create dynasties that have, historically, lasted for generations. It’s time that we focus more on what the country needs instead of encouraging such dramatic wealth inequity.
Byrnes: There’s no way Sanders’ estate tax scheme will ever become reality, so I’m not overly concerned. I do think this might be a call to action for wealthy clients who have tended to sit back and rely upon the generous estate tax exemption rather than engaging in any type of estate planning—and a reminder that estate planning is about more than just the transfer tax itself.
