Posted on 03/30/2021 1:46:26 AM PDT by Libloather
Several Senate Democrats are pushing to boost federal revenue by taxing certain capital gains that are passed down after death.
Traditionally, unrealized capital gains have not been taxed, allowing wealthy individuals to transfer stocks, bonds and real estate investments to their children and grandchildren without the recipients being taxed.
Under current law, heirs don’t have to pay tax on the capital gains that were accrued by an asset or investment before they received it. They only have to pay capital gains taxes on an inherited asset after they sell it, and they only have to do so for the amount the asset or investment appreciated after it came into their possession.
Democrats, led by Sens. Chris Van Hollen (D-Md.), say it’s time for that to change.
Van Hollen has joined with Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Cory Booker (D-N.J.) and Sheldon Whitehouse (D-R.I.) to introduce a proposal to close what they call the “stepped-up basis loophole by taxing the unrealized capital gains of fortunes on which the original owner never paid income or capital gains taxes."
“The stepped-up basis loophole is one of the biggest tax breaks on the books, providing an unfair advantage to the wealthy heirs every year. This proposal will eliminate that loophole once and for all. It’s time to stop subsidizing massive inheritances for the rich and start investing in everyday Americans,” Van Hollen said in a statement Monday afternoon.
(Excerpt) Read more at thehill.com ...
The death of generational wealth and the family owned farm
Hope all the idiots that voted for these Democrats enjoy their new taxes.
We tried to tell them. They never listen.
“Traditionally, unrealized capital gains have not been taxed, allowing wealthy individuals to transfer stocks, bonds and real estate investments to their children and grandchildren without the recipients being taxed.”
Terrible, shoddy “journalism”. Do they not have editors? Have they not heard of the federal inheritance tax? Yes, it has a large exemption at present but it still exists and has for a very long time. Perhaps they mention it later in the article but the part excerpted is flatly false.
Bastards. Aside from the confiscatory, Marxist nature of this proposal, it ignores major parts of the rationale for the stepped-up basis.
1. Much of a typical “capital gain” is not a real gain in capital at all. It’s mere price inflation. Real property, for instance, may not have actually been improved in any way. It’s simply worth more because the Fed has devalued the dollar.
2. For some things like publicly traded stocks, it’s simple enough to calculate basis (i.e., it’s simply purchase price). But for a ton of other stuff, like real estate that has been improved over the course of decades, it’s damned near impossible to figure out how much capital has truly been invested in the place. Hence the stepped-up basis is a tool of simplification. When you’re trying to figure out the basis of grandma’s house that she bought 60 years ago, and remodeled, and expanded, and improved, it’s a hell of a lot easier, simpler and cleaner to just take the date-of-death value as the basis than to try to really calculate how much grandma invested in the place.
Everyone ought to be able to deduct inflation off of any gains and interest.
I am not 100% sure on the tax implications, but I would put everything into a trust and put my heirs as owners of the trust upon my death, basically transfer ownership before death....
“...and the family owned farm”
The corner store and any other sole owner or family business.
To be honest — of all the idiotic Democrat tax proposals I've seen, this one seems to be the least idiotic. It involves a tax that must ultimately be paid anyway, and simply changes the timing of when part of it is paid.
“It involves a tax that must ultimately be paid anyway, and simply changes the timing of when part of it is paid. “
I don’t think that is right. When you inherit something, the basis generally steps up to the value at the time you received it. This makes sense because otherwise we would be taxing estates twice - through the inheritance tax and through the capital gains tax. It is true there is a big exemption on the inheritance tax but keep in mind that the exemption applies regardless of the number of heirs (so if you have ten kids each receiving 1/10th of the farm, they have to pay the same tax / same exemption as where there is an only child.
By the way they do tax assets in retirement accounts (401k or IRA) based on the cost basis of the original owner and at the higher regular income tax rate (not the capital gains rate).
The step up in cost basis at the time of a person’s death only applies to non retirement assets.
They all closed during lockdown...
“Democrats are the greediest people you’ll ever meet.”
Of course. That’s why they want to take everyone ELSE’S money and give it away, they haven’t the character to give much of their own.
STINGIEST bastards on Earth are leftists, among whom charitable giving jiggles the needle at about 2%.
It is not complicated. Democrats preach big tent and inclusivity. That brings in more voters. For Most voters want to be included is more important than paying taxes. Good example is on DUmmies you will never see anti any ethnic group threads allowed. On FR ethnic hate posts are allowed to stand.
bmp
The federal estate tax already catches “the richest”.
This is squarely aimed at the middle class.
Here’s a thought. Most Reps/Senators make millions as “public servants” and many stay until death in office as long as they are re-elected (Byrd, McCain, others) not to mention the “retirement packages” and death benefits they receive- continued salaries after leaving office, so why not extend the “Capital gains” to include accumulated wealth by Politicians?
I would suggest that any and all gains made during “public service” are subject to the capital gains tax rate plus 25% upon retirement from the senate or house or upon their death if they pass while in office.
The only reason politicians pass the laws they do is that they are exempt from the impacts. When you tie the pain to their actions, maybe they will look to truly serve the public rather than themselves.
“For Most voters want to be included is more important than paying taxes.”
Do you mean this also applies to “most” voters who belong to the GOP? I guess I am not one of them.
The demonkkkraps preach (lie) a lot of things (crap) in order to rake in the money (taxes) for themselves, throwing just enough scraps (fill in the blank) to the dogs (their voters) and making all sorts of rules/laws to build utopia on earth to ensure they maintain their power. So their people “think” they belong because they are willing to settle for their scraps and are lied to keep them in line.
If the demnkkkraps could maintain political power without no voting, they would do it and use scraps (and execution) to keep people in line. 80 million Buyden voters couldn’t be wrong. /s
Givernment is their church, their religion. As another on this thread points out, they give little to charity. While what a person gives from their own heart is between them and God, this statistic makes sense because they believe in and live off of the forced contributions to their church - the givernment. They also print money to make up any shortfall.
Absolutely
rather than taxing the payoffs from Federal bribes, we could all just ban them and enforce the law?
What a novel idea!!
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