Maryland Democratic U.S. Sen. Chris Van Hollen has come up with a new approach to solve the Social Security funding issue and typical wealth advocates don’t like it much because it would reduce the giveaways to wealthy Americans through the estate tax as part of the 2017 tax bill passed by the Republican majority in Congress and signed by President Donald Trump. The measure, known as the Strengthen Social Security by Taxing Dynastic Wealth Act, seems to have some in the Republican Party a little worried it may catch on because the National Review recently posted this article criticizing the proposal. Why would taking away tax grabs to the wealthy to help save benefits for the disabled and elderly be a good idea? Below is a news release from Van Hollen’s office outlining the proposal, so you can be the judge.
VAN HOLLEN INTRODUCES THE STRENGTHEN SOCIAL SECURITY BY TAXING DYNASTIC WEALTH ACT
Today, U.S. Senator Chris Van Hollen introduced the Strengthen Social Security by Taxing Dynastic Wealth Act, which would provide an immediate investment into Americans’ retirement security. The bill would return the estate tax to 2009 levels – rolling back the most recent boon for wealthy estates in the 2017 Republican tax law – and depositing all of the revenues from this tax into the Social Security Trust Fund. Senator Van Hollen has also introduced the Social Security 2100 Act, which would strengthen the program over the long term while expanding benefits. Taken together, these bills show that there are more than enough options to sustainably expand Social Security without cutting benefits.
“In 2017, Republicans in Congress secured their latest massive giveaway on the estate tax – delivering a $4.4 million tax cut per couple to just 1,900 estates in the entire country at the same time they refused to support vital national priorities. That was unconscionable, and we must return the estate tax to a more reasonable level,” said Senator Van Hollen. “I can think of no better way to use for that revenue than to strengthen Social Security. This program has been under attack in recent years, and we must fight to protect it. With this new legislation, we can ensure all hard-working men and women have financial security in their later years – not just the wealthy few.”
The Strengthen Social Security by Taxing Dynastic Wealth Act would:
- Raise the estate, gift, and generation-skipping transfer taxes back to the levels they were at in 2009, as follows:
- Increases the top estate and gift tax rate from 40 percent to 45 percent.
- Exempts the first $3.5 million of an individual’s estate from estate taxes ($7 million for married couples).
- Sets the lifetime exemption limit for gifts at $1 million for an individual ($2 million for married couples).
- Maintains the generation-skipping transfer tax as an anti-abuse measure to prevent circumvention of estate taxes, and as under current law, the parameters of that tax would conform to the new estate tax parameters.
- Combine Social Security’s two trust funds – the Old Age and Survivors fund and the Disability Insurance fund – into a single trust fund.
- Deposit all of the revenues from the estate, gift, and generation-skipping transfer taxes into the Social Security OASI/DI Trust Fund.
A full text of the bill being offered can be found here.
