Hillary Clinton took Senator Bernie Sanders’ lead by proposing a change to the estate tax rules that would add three new tax bracket on the largest estates. Under her proposal, a 50% rate would apply at estates over $10 million per person, a 55% rate on estates over $50 million per person, and a top rate of 65% imposed on estates exceeding $500 million per person. Admittedly, this increase will affect a tiny number of Americans.
However, Hilliary Clinton has also proposed to repeal the step-up in basis rule that allows appreciated assets to have their costs basis increased at the death of the owner–which has the effect of substantially reducing capital gains tax when those assets are sold. Thus, a repeal of the step-up basis rules would increase income taxes on estates and heirs substantially.