Treasury Secretary Steven Mnuchin openly conceded Friday that eliminating the estate tax does benefit the wealthy, despite President Trump’s assertion that it was being cut in the tax reform framework to help farmers.
“Obviously, the estate tax, I will concede, disproportionately helps rich people,” Mr. Mnuchin said at the Institute for International Finance conference in Washington, D.C.
Mnuchin said there were economic and philosophical reasons for gutting the so-called “death tax.” He said that many American give half their income to the government through taxes and they should not need to continue to give the government more of their money once they die, even for the families who are wealthy.
Mnuchin’s remarks stand in stark contrast to the rationale offered by his boss in explaining why he opposed the estate tax.
“To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax,” Trump said in Indiana after the tax reform framework had been unveiled.
Although the first $5.49 million of an inheritance from an individual is exempt from taxation, it subsequently is taxed at a rate of 40 percent. This allows couples to leave heirs up to $11 million untaxed. Only a few thousand wealthy estates are impacted by the death tax each year.
The Republicans’ framework for tax reform cuts lowers business and individual tax rates, along with repealing the estate tax.
Democrats and other critics have condemned the plan, saying it only benefits the wealthy and would add to the deficit.
