With the general election right around the corner, many Tennessee residents are paying close attention to the promises and proposals made by this year's presidential candidates. The topic of inheritance tax changes is a particular area of concern for many families. Democratic candidate Hillary Clinton has proposed significant increases to the current estate tax law, which would require the nation's wealthiest families to pay significantly more than they would under the current rules.
Secretary of State Clinton has proposed increasing the estate tax to between 50 and 65 percent. Currently, the estate tax exemption sits at $5.45 million, with wealth exceeding that amount subject to an estate tax rate of 40 percent. In the past, Clinton has proposed reducing the exemption amount to $3.5 million.
Under Clinton's proposal, only families with an estimated wealth that exceeds $500 million would be subject to the 65 percent rate. It has been argued that families at that level of wealth also have the means and financial savvy to hire professional accountants and estate planning attorneys that could put together a plan to reduce or even eliminate their estate tax obligations. Many people are concerned that the families most likely to be affected by this change are those that have done well for themselves but are not among the ultra-wealthy.
Of course, it should also be noted that the promises made on the campaign trail do not always come to fruition once the ballots have been counted. Clinton would likely face significant legislative challenges to increasing the inheritance tax. That said, many Tennessee residents are concerned about the financial changes that both candidates have proposed, and will continue to follow the election process as November approaches.
Source: Forbes, "Hillary Clinton Vows 65% Estate Tax To Donald Trump's Repeal", Robert W. Wood, Sept. 23, 2016