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On March 25, 2021, Sen. Bernie Sanders and the White House formally proposed a bill called “For the 99.5% Act” so called because it aims to tax the wealthiest 0.5% of Americans which proposes to change our current estate and gift tax system.
While there’s no telling whether this proposed law will be enacted, it seems best to “plan for the worst and hope for the best,” given the unpredictable political climate, and the possible changes that may be made if a watered-down version of this potent proposed law passes.
Some Basics of the 99.5% Act
One of the main features of the 99.5% Act is that it would cut the federal gift & estate tax exemption amount from the current $11.7 million to $3.5 million. The good news is that the reduction would not occur until Jan. 1, 2022. The same timing applies for the bill’s proposed reduction of the gift tax allowance to only $1 million, which means that people will not be able to gift more than $1 million after 2021 wit