Hillary Clinton is proposing new ways to raise taxes on the super-wealthy by cracking down on tactics they’ve exploited to minimize their burden.
The Democratic presidential frontrunner on Tuesday called for closing a pair of loopholes that some have used to shield billions in personal wealth. One, which the campaign dubbed the “Bermuda reinsurance loophole,” involves cycling income through reinsurance outfits they’ve set up in low-tax locales to reduce what they owe on it in the U.S. The scheme has proven popular among New York financiers, including John Paulsen, Dan Loeb, and David Einhorn. The other, which her camp is calling the “Romney loophole,” allows the ultra-rich to shield wealth from taxation by stashing it in individual retirement accounts — a move that 2012 Republican nominee Mitt Romney used to protect as much as $102 million.
Clinton’s call Tuesday for the reforms followed a Monday pitch she made for a 4% tax on individual income exceeding $5 million a year. That levy, which Clinton dubbed the Fair Share Surcharge, would hit 0.2% of taxpayers and raise about $150 billion over a decade, per the campaign. And she has already talked up the need for the so-called Buffett Rule — named for billionaire investor Warren Buffett, who’s endorsed her — to ensure anyone making more than $1 million a year pays at least 30%.
The proposals come as Clinton faces a surprisingly stiff challenge for the Democratic nod from Vermont Sen. Bernie Sanders. The self-described democratic socialist appears to have pulled even with Clinton in Iowa, where voters will gather to caucus in a mere 20 days, and enjoys a slight edge in New Hampshire, which hosts its primary eight days later. Sanders has staked his bid on the issue of income inequality.