On Thursday, Hillary Clinton did something very unusual for a candidate in a general election race: She proposed a significant new tax increase.

Naturally, this was a tax hike that will affect very few Americans. Clinton essentially adopted a proposal from her old primary rival Bernie Sanders to substantially raise estate tax rates, setting a top rate of 65 percent. Basically nobody pays the estate tax; in 2013, nearly 2.6 million people in the US died, and only 4,687 of them paid the tax. That's only 0.18 percent of deaths. And those who did pay it were overwhelmingly rich; it’s the most progressive tax in the federal code, and the first $5.45 million of an estate, or $10.9 million for couples, is totally exempt from taxation.

But Clinton’s move is notable all the same. She had unveiled a proposal to raise the tax in January, but it would've only raised the top rate to 45 percent from the current 40 percent. Now she's joining Sanders in going all the way up to 65 percent, a rate that would only apply to estates worth more than $500 million ($1 billion for couples).

The Clinton/Sanders proposal wouldn’t change the fact that very few Americans pay the tax. Both have only proposed reducing the exemption to $3.5 million per person, which is very high by historical standards. (Back in 2001, it was only about $900,000.)

That said, 65 percent would be the highest rate in more than three decades, and would represent a significant move in the federal tax code toward treating the ultra rich differently than the merely rich.

The estate tax is at historic lows — and the Clinton/Sanders plan wouldn’t change that

The estate tax isn’t the lowest it’s ever been. It reached that milestone back in 2010, when it hit a rock-bottom top rate of 35 percent. Even that was an increase, as the Bush tax cuts of 2001 had originally slated the tax to expire entirely that year; it was only through a deal with Senate Republicans that President Obama was able to reimpose the tax that year, avoiding a perverse situation where it was in families’ interest for relatives to schedule their deaths in 2010 rather than 2011. Then in 2012, as part of another tax deal, the rate bumped up to 40 percent again.

All the same, 40 percent is way lower than the tax was as recently as Bill Clinton’s administration:

The Tax Reform Act of 1976, signed into law by Gerald Ford, cut the top rate to 70 percent, and then the Reagan tax cuts of 1981 pushed the top rate down dramatically to 50 percent. Bill Clinton's first budget in 1993, which featured a number of tax hikes on high-income individuals to help balance the budget, bumped the rate up to 55 percent, before it came tumbling back down in the Bush years.

The Bush tax cuts also had the effect of dramatically increasing the exemption:

The result was an estate tax that hit fewer people, and hit them less hard, than it had since before the FDR administration.

The Clinton/Sanders plan attempts to reverse this trend, but its effects are more modest than they may initially appear. For one thing, the current "top rate" is the only rate anyone pays. That’s because it applies to all estate value over the exemption amount; all the brackets below that apply to the nontaxable part of the estate and can usually be ignored (the Motley Fool has a great explanation of this). But the Clinton/Sanders top rate would only apply to a small portion of estate taxpayers; the rest would still face a tax hike, but a much less dramatic one.

Effectively, Clinton and Sanders would create a tax with four brackets:

45 percent, for estate value from $3.5 million (the exemption amount) to $10 million

50 percent, for estate value from $10 million to $50 million

55 percent, for estate value above $50 million

An additional 10 percent surtax on value above $500 million, creating a de facto 65 percent bracket

This is a real hike; estimates from the Tax Policy Center of the Sanders plan suggest it will raise about $75 billion over a decade, a relatively small amount relative to the federal budget but substantial considering the estate tax only brought in $19.2 billion last year.

But it doesn’t get the estate tax back to where it was before Reagan and Bush started slashing it aggressively. And it doesn’t implement reforms that could make the tax a more effective tool for breaking up concentrated wealth. A number of tax analysts, notably NYU Law's Lily Batchelder, have proposed moving to an inheritance tax, where the living beneficiaries of an estate, rather than the deceased person's estate itself, would include inheritance money in their taxable income and perhaps pay an additional surtax on it.

This ensures that the most affluent inheritors pay the most, and giving each beneficiary a lifetime exclusion of $1 million to $2 million would encourage estates to distribute to more people, breaking themselves up into smaller pieces and more effectively combating entrenched dynamic wealth than the current tax. Inheritance taxation also has a political benefit, in that it would mean the government is not technically taxing dead people.