Bernie Sanders Floats New Estate Tax Bill

Sen. Bernie Sanders, I-Vt., reintroduced Tuesday the For the 99.5% Act, legislation that would establish a new progressive estate tax rate structure for Americans who inherit over $3.5 million in wealth.

Less than 0.5% of Americans leave an estate above this threshold, according to a Wharton Budget Model analysis cited by Sanders.

Rep. Jimmy Gomez, D-Calif., introduced companion legislation the same day.

Sanders first introduced the bill in 2021.

Both bills also impose a 45% tax rate on the value of an estate between $3.5 million and $10 million, with the tax rate gradually increasing to 65% on the value of an estate above $1 billion. “This is not a radical idea,” Gomez said in a statement. “In fact, from 1941-1976, the top estate tax rate was 77% on estates worth more than $50 million.”

(An estate worth $50 million in 1976 would be worth $265 million in today’s dollars.)

The bill would also end tax breaks for dynasty trusts, “close other loopholes in the estate and gift tax, and provide protections for family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes,” the lawmakers said.

The current estate tax exemption is $12.92 million, indexed for inflation. The exemption will be cut in half in 2026 unless new legislation is passed.

Sanders added in the statement that “over and over again, Republicans in Washington have professed their deep concern about the national debt and yet virtually all of them have signed onto legislation that would provide a $1.8 trillion tax giveaway to billionaires by repealing the estate tax. How absurd is that?”

At a time of “massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes,” Sanders stated.

The bills are endorsed by Americans for Tax Fairness, a coalition of more than 420 national, state and local endorsing organizations, including AFL-CIO, AFSCME, Patriotic Millionaires, and Public Citizen.

The bill comes on the heels of legislation introduced by 41 Senate Republicans to permanently repeal the estate tax — the Death Tax Repeal Act — ”would provide a $1.8 trillion tax giveaway to billionaires in America and would only provide relief to the top one-tenth of one percent,” Sanders and Gomez said.

Gomez and Sanders said that under their legislation, “the families of all 735 billionaires in America — who have a combined net worth of more than $4.5 trillion — would owe up to $1 trillion more in additional estate taxes.”

According to the Joint Committee on Taxation, a previous version of the For the 99.5% Act would raise $430 billion over its first 10 years of enactment, Gomez and Sanders said.