Democratic Maryland Sen. Chris Van Hollen has proposed legislation that would raise taxes on the nation’s largest inherited fortunes and funnel the revenue into Social Security, putting renewed focus on how wealth is passed down and who benefits from federal tax policy.
“[President] Donald Trump and Republicans are fueling the rise of an American aristocracy through their massive tax giveaways for the wealthy— including their cuts to the estate tax that have allowed the country’s richest people to leave increasingly exorbitant sums of wealth to their heirs,” Van Hollen said. “These are handouts to those who are already well off, given at the expense of investing in shared prosperity for all.”
The measure, titled the “Strengthen Social Security by Taxing Dynastic Wealth Act,” would restore estate, gift, and generation-skipping transfer taxes to 2009 levels and direct all resulting revenue into the Social Security Trust Fund.
Under the measure, the top estate and gift tax rate would increase from 40% to 45%, while the exemption would drop to $3.5 million for individuals and $7 million for married couples. Current law allows exemptions of roughly $15 million for individuals and $30 million for couples, shielding a far greater share of inherited wealth from taxation.
The bill also sets a lifetime gift exemption at $1 million per individual and keeps in place rules designed to prevent wealthy families from avoiding taxes through generation-skipping transfers.
Beyond tax changes, the legislation would merge Social Security’s Old-Age and Survivors Insurance Trust Fund and Disability Insurance Trust Fund into a single Social Security Trust Fund. All revenue generated from estate, gift, and related taxes would be deposited into that unified fund.
The proposal comes as lawmakers face mounting pressure to address Social Security’s long-term finances. Without congressional action, the program is expected to face funding gaps in the years ahead, prompting competing plans that range from benefit cuts to new revenue streams.
Van Hollen’s bill takes direct aim at the estate tax cuts enacted during the Trump administration, which expanded exemptions and reduced the number of estates subject to taxation. Supporters of those cuts have argued they protect family businesses and farms, while critics say the overwhelming benefit goes to the wealthiest households.
“This essential legislation, would strengthen our Social Security system while also greatly reducing inequality,” said Alex Lawson, executive director of Social Security Works. “Over 220 years ago, Founding Father Thomas Paine advocated for using an estate tax to pay for pensions for older Americans and people with disabilities. This bill would make Paine’s vision a reality.”The legislation would apply to estates and gifts after Dec. 31, 2026, with the creation of a single Social Security Trust Fund taking effect Jan. 1, 2027.
“This legislation ends Republicans’ estate tax giveaway and uses the proceeds to help shore up Social Security, an important step toward ensuring that Americans who work for a living – not just the wealthy few – can have financial security when they retire,” Van Hollen said.