IF REPUBLICANS ALLOW THIS TO GET PASSED THEY DESERVE ……

……well, I can’t say it but it would involve lots of pain and an unfortunate demise at the hands of Divine Intervention.

A new “death tax” that could very well screw some of you.

You may not think so now but if you live long enough and your investments and home continue to appreciate then your kids will get left holding the bag.

Using examples in the article that socialist aristocratic prick who never made anything or contributed to the wealth of our nation will pay nothing and a person with a similarly valued business started from scratch would pay millions.

President Biden proposes to “eliminate the loophole that allows the wealthiest Americans to entirely escape tax on their wealth by passing it down to heirs.” A White House “fact sheet” claims that “our tax laws allow these accumulated gains to be passed down across generations untaxed, exacerbating inequality.”

In fact, while most Americans can pass wealth to their heirs without incurring federal taxes, “the wealthiest” can’t. The federal estate tax applies when the person who has died has a net worth of $11.7 million or more (or twice that for married couples), and it rises to 40% after the first $1 million in taxable assets. Mr. Biden’s American Families Plan would subject many estates worth far less than $11.7 million to a punishing new death tax.

The plan would raise the total top rate on capital gains, currently 23.8% for most assets, to 40.8%—higher than the 40% maximum estate tax. It would apply the same tax to unrealized capital gains at death, exempting only the first $1 million ($2 million for a married couple) plus $250,000 for a personal residence.

To understand how uneven the burden of this tax is, consider a hypothetical taxpayer for whom it would be especially heavy: a woman who, as a young widow decades ago, bought a home in New York City for $250,000, reared her children there, and never remarried. The property is now worth $2.5 million and is her only asset. If she dies after the Biden plan becomes law, the estate itself wouldn’t be taxable, but it would be subject to the new death tax on $1 million of the unrealized gain from the home (the $2.25 million appreciation less the $1.25 million in exemptions). Her grown children would inherit $408,000 less than under current law. The Biden tax would be based on the value of the asset, not the equity, so the estate would be liable for the full amount regardless of any mortgage outstanding.

Now consider an actual couple who would likely escape the new tax entirely. Joe and Jill Biden have an estimated net worth of $8 million, according to Forbes. Mr. Biden’s disclosures indicate that their assets consist of two personal residences along with several annuities and life insurance policies. The only assets that would be subject to a capital-gains tax at death would be their two homes, the appreciation on which likely amounts to less than the $2.5 million in exemptions for a married couple.

A married entrepreneur in New York with identical wealth to the Bidens ($8 million) could face a new death tax of up to $2.4 million if his net worth consisted solely of his interest in a company that he started 30 years ago that subsequently went public.

The American Families Plan would result in negative value at death for many long-held leveraged real-estate assets. Ignoring the exemptions, if a $12 million estate included a long-held building with a fair market value of $5 million, debt of $4 million and a tax basis of $900,000, the capital gains tax at death would be nearly $1.7 million. The $672,800 in excess of the fair-market value after debt would be a liability against the remaining estate.

Scenarios in which the new death tax would significantly reduce, nearly eliminate or even totally eliminate the net worth of decedents who invested and held real estate for decades wouldn’t be uncommon.

The Internal Revenue Code has never taxed unrealized gains at death. The estate tax has always been a tax on the net assets of the taxpayer. Suddenly taxing unrealized appreciation as a separate and new tax—subjecting what could be millions of estates whose owners yesterday had nowhere near the assets to be subject to any death taxes—is a breach of faith.

The immediate effect of the American Families Plan’s passage would be dramatic. Every estate plan would be reviewed to offset the new death tax by reducing charitable donation. Plans in place to pay for college for future generations—our New York widow’s grandchildren, for instance—would be curtailed.

The American Families Plan would discourage long-term investment. That would be particularly true for those with existing wealth who would begin focusing on cash flow rather than long-term investment. The combination of the new death tax plus existing estate tax rates would change risk-reward ratios.

The American Families Plan creates a new and significant death tax that would tax estates of individuals who should not be taxed at death. If lawmakers want more revenue from decedents, they should raise the tax rate or lower the exemption, not add a new tax on unrealized gains. At least those changes wouldn’t be a total abandonment of the rules that have been in place for the lifetimes of most Americans.

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1 Response to IF REPUBLICANS ALLOW THIS TO GET PASSED THEY DESERVE ……

  1. Call me Infidel says:

    This is the kind of shit the socialists introduced into Britain after ww2. Partly to pay for the welfare and national health service, but also to try and repay collosal war debts. On top of that being socialists they resented the wealthy and it meant that many of the large pre-war country estates were now unaffordable.

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