Last week, Senator Sanders (D-VT) introduced the For the 99.5% Act. The legislation calls for raising the top death tax rate to 65 percent and increasing the number of family businesses hit by the death tax. The schedule for the proposed plan is below.
|Estate Tax Rate||Estate Tax Exemption Level|
|45%||$3.5 million and $10 million|
|50%||$10 million and $50 million|
|55%||$50 million and $1 billion|
|65%||$1 billion +|
Many medium to large size family business owners competing with even larger corporations would be forced to fire workers and downsize facing such high tax rates when passing to the next generation of ownership. Business owners already face a number of taxes during their lifetime like income taxes, capital gains taxes, state and local taxes, franchise taxes, and then if enough is left over when they die, estate tax. The for the 99.5% Act would force more family businesses to grapple with a tax at the worst possible time – upon the death of a business owner.
While our team does not expect this legislation to become law, we continue to monitor its movement in committee and in the Senate.