While the hand-wringing over Donald Trump’s 1994 tax returns continues, it wasn’t long ago that the Clintons themselves were under a microscope for engaging in tax-avoidance. In 2014, Bill and Hillary Clinton were exposed for engaging in creative accounting practices in order to minimize their exposure to the Estate Tax, a tax that Hillary, ironically, hopes to raise to 65% if elected president.
The Estate Tax, which is commonly derided as the “death tax”, is a tax on assets an estate upon an individual’s death.
In 2014, Bloomberg reported:
To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.
The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.
Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.
“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”
Based on Bloomberg’s reporting, it appears that the Clintons have engaged in the very practices Hillary now admonishes Donald Trump for engaging in, namely avoiding federal taxes through legal means.