Hillary Clinton will call for an increase in the estate tax on the campaign trail, a plan one senator says will be a win for the life insurance industry—a sector that has given generously to the former secretary of state throughout her political career.
Bloomberg News reported on Tuesday that a campaign aide close to Clinton has said that the Democratic presidential candidate will advocate for an increase in the estate tax rate, also known as the death tax, from 40 percent to 45 percent. In addition to raising the rate, Clinton wants to lower the threshold for when taxing would occur on individual estates from $5.45 million to $3.5 million, which is identical to a plan previously put forth by President Obama in a budget proposal.
Sen. Mike Lee (R., Utah) fired back at the announcement by saying the proposal, if implemented, would benefit the insurance industry and that individuals who are wealthy enough could avoid paying Hillary’s proposed death tax increase by purchasing life insurance that would eventually be paid out without being taxed.
“Hillary Clinton’s estate tax hike would be a huge win for insurance companies,” Lee said in a statement provided to the Washington Free Beacon. “Life insurance proceeds, you see, are exempt from federal estate taxes. So if someone is rich enough to afford good lawyers, they could avoid Hillary’s 45 percent tax by purchasing lots of insurance that would be paid out to their heirs, tax-free.”
Clinton has been a major recipient of campaign cash from the industry Lee says will benefit from Clinton’s proposed plan, having received more than $2 million since first running for office.
Clinton received $167,550 from the insurance industry during her 2000 Senate campaign. During her 2006 re-election effort, Clinton became the industry’s third-largest recipient, pulling in $397,110 from the sector. Again, during the 2008 presidential campaign, Clinton was in the top three recipients from the industry, hauling in $1,260,400 in campaign contributions.
Hillary is currently leading in contributions from the insurance sector for the 2016 elections, having pulled in $269,054 to date this cycle.
A top donor from the industry, New York Life Insurance, has given hundreds of thousands to Clinton’s campaigns throughout the years, making her the top recipient in 2006 and 2008 of donations from employees of the company.
New York Life Insurance brought Heather Podesta and Partners on board to lobby on their behalf last year, paying the company $150,000 for their services.
Heather has close ties to Clinton and is the former wife of Tony Podesta, Democratic lobbyist and owner of the Podesta Group, and former sister-in-law of John Podesta, the chairman of Clinton’s 2016 presidential campaign. Heather hosted at least one $2,700-per-head fundraiser for Clinton at her Washington, D.C. residence last year.
The Clintons have also reportedly used estate-planning techniques that could help them partially avoid the exact tax Hillary is proposing, Bloomberg reported Wednesday.
The Clintons created residence trusts in 2010 and proceeded to shift ownership of their New York home into those trusts the next year. The trusts, which allow the removal of a personal home from the creator’s estate, provide tax advantages that could save the Clintons hundreds of thousands of dollars on estate taxes in the future, according to the report.
Neither Hillary Clinton’s campaign nor Heather Podesta returned a request for comment by press time.