Castro Proposes New Inherited Wealth Tax: Campaign Update

(Bloomberg) -- Julian Castro proposed a new inherited wealth tax on heirs receiving more than $2 million in their lifetimes, which he said he would use to help pay for a $3,000-per-child tax credit and expansion of the Earned Income Tax Credit.

The Democratic presidential candidate also would also match the capital gains tax rate to that paid on earned income. For those making more than $400,000, the marginal rate would be 40%. And Castro would use a mark-to-market accounting method that would tax assets as they appreciate, not when they’re sold.

Castro’s tax plan, released Thursday, differs from wealth taxes offered by rivals Bernie Sanders, who has proposed a 77% tax on billionaires’ estates, and Elizabeth Warren, who wants a tax of at least 2% on all assets of more than $50 million. Castro didn’t specify the rate for his inheritance tax, but it’s based on a “silver spoon” tax proposal that would charge 15% above the income tax rate.

“Why in the richest nation on Earth should we tax work more than wealth?” Castro said in a blog post announcing the plan. “The wealthy few have set up the rules to work for themselves, while working families who labor for a living are left behind.”

O’Rourke to Campaign, But Not in Early States (10:38 A.M.)

Resisting calls to drop out of the Democratic presidential race, Beto O’Rourke vowed to press on to fight President Donald Trump -- but not the way most candidates do it.

Rather than go to early voting states like Iowa and New Hampshire, O’Rourke said he would instead visit places that he said had been damaged by Trump’s rhetoric or policies. On Friday, for example, he will go to the sites of recent immigration raids in Mississippi, that left some children alone and unsupervised.

O’Rourke, who paused his campaign for more than week in the aftermath of the mass shooting in his hometown of El Paso, Texas, said he was returning to the trail to fight Trump, whom he called “the gravest threat” the U.S. had ever known.

“Some have suggested I stay in Texas and run for Senate, but that would not be good enough for for El Paso and it would not be good enough for this country,” he said. “We must take the fight directly to the source -- to the person that has caused this pain and peril: Donald Trump.”

O’Rourke ran for Senate in 2018 and was narrowly defeated by incumbent Republican Ted Cruz. Some Texas Democrats have implored him to drop out of his flagging presidential effort and run in 2020 against Republican Senator John Cornyn. -- Tyler Pager

Warren Matches Sanders With N.H. Turnout (6:15 A.M.)

Democratic presidential candidate Elizabeth Warren drew almost as many supporters as Bernie Sanders during half as many campaign events in New Hampshire this week, as the two New England senators made their pitch to Granite State voters.

About 700 people gathered at a Warren town hall in Franconia and another 400 at a house party in Wolfeboro on Wednesday, according to her campaign.

Sanders, who held four events in the state Monday and Tuesday -- double that of Warren -- drew a crowd of 460 at his largest in North Conway, per his campaign, Some 146 Sanders backers turned out for a breakfast in Berlin, and a total of about 600 attended gatherings in Littleton and Wolfeboro.

Crowd counts provide an unofficial gauge of interest for candidates, particularly in key states. A Suffolk University-Boston Globe poll conducted Aug. 1-4 found Sanders ahead of Warren in New Hampshire, 17% to 14%, though both candidates trailed front-runner Joe Biden’s 21%.

Sanders enjoys a slight advantage in New Hampshire, a state that’s already familiar with his progressive policy proposals because of his 2016 win there. Warren has more ground to cover and is making her way through the state to meet voters for the first time.

Warren and Sanders, senators who hail from the neighboring states of Massachusetts and Vermont, are counting on regional appeal as they battle for dominance ahead of the state’s February primary, which will play a crucial role in their bids for the party’s nomination. -- Misyrlena Egkolfopoulou

Coming Up

* President Donald Trump holds a “Keep America Great” rally in Manchester, New Hampshire, on Thursday.
* The Democratic National Committee holds its meeting Aug. 22-24 in San Francisco. All Democratic presidential candidates are expected to speak.
* The next round of Democratic presidential debates is Sept. 12-13 in Houston. So far, nine candidates have qualified to participate.

--With assistance from Misyrlena Egkolfopoulou and Tyler Pager.

To contact the reporter on this story: Gregory Korte in Washington at gkorte@bloomberg.net

To contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Steve Geimann

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