Hillary Clinton says she wants to reduce the estate tax exclusion amount from $5.45 million to $3.5 million. She also says that she will restore the 2009 estate tax rate schedule and impose even higher rates on very large estates: 50% starting at $10 million, 55% starting at $50 million, and 65% starting at $500 million. If Clinton wins the presidency (as she most likely will), and if she gets her estate tax plan through Congress (a much bigger “if”), and if she makes no further adjustments to the way that estate taxes are calculated, what would be the maximum effective tax rate on estates?:

(A) Something less than 65%

(B) 65%

(C) 100%

(D) Infinity

One might think the answer is (A), because even a multibillion dollar estate pays tax at less than a 65% rate on the first $500 million (given the progressive rate structure). Yet the answer is potentially (D), infinity (or, perhaps more precisely, undefined). The details are somewhat complicated, but if you’re interested in the estate tax for personal, professional, or policy reasons, bear with me.

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