Strengthen Social Security by Taxing Dynastic Wealth Act

Key Points

• The bill dramatically lowers the estate tax exemption from the current level (over $13 million per individual) to $3.5 million, meaning many more estates would owe federal taxes when someone dies. This returns the exemption to where it was in 2009.
• The top estate tax rate would jump to 45% on taxable estate value above $1.5 million (after the exclusion). A graduated rate structure would apply: 41% on the first $250,000 above $1 million, 43% on the next $250,000, and 45% on everything above $1.5 million.
• The gift tax exemption would also be reduced separately. Individuals could only give away up to $1 million during their lifetime without paying gift taxes, down from the current exemption that matches the estate tax level.
• All revenue from estate and gift taxes would be directed into Social Security, creating a new dedicated funding stream. This is meant to help extend the life of the program and ensure full benefits can keep being paid.
• The bill merges the two existing Social Security trust funds (Old-Age and Survivors Insurance, and Disability Insurance) into a single "Social Security Trust Fund," simplifying the program's financial structure starting January 1, 2027.
• The new estate and gift tax rules would apply to deaths and gifts occurring after December 31, 2026. The trust fund merger and the transfer of estate tax revenue into Social Security would take effect on January 1, 2027.

Votes

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Related Bills

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