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It is tiered. There is no tax on the first few million at all.
There's no tax on the first 10 million.
Is that going to make it through the senate?…
Tax increases can pass through reconciliation
Honestly, the bigger deal in this is eliminating stepped up basis. That's less a loophole, and more of a cargo tunnel.
It eliminates step up on inherited property above $1 million as well. That's a pretty big deal no one seems to be talking about either. Home sales above $1 million have increased significantly across the country and will continue to do so. Inheriting a property of that value and keeping it would be very difficult unless you've got a couple hundred thousand dollars in cash lying around to pay the taxes at the time of the owner's death. I suppose you could always grab a loan against the newly inherited property to pay the taxes owed.
And a whole lot of people who will pay zero tax as a result of this will be upset.
Good. Time to end family generational dynasties.
People really need to start calling this a "dynasty tax". Because that is what it is.
Especially when you remember that those taxes don't even start to apply until you are already talking about estates worth millions.
Now watch the "yer own bootstraps" crowd freak out that it isn't fair.
The answer the give is about a family farm being passed down to you and you having to pay exorbitant fees on it or sell it and then you lose your family farm. Regardless of how many family farms would exceed this minimum for this tax to kick in.
Cue the people with tiny estates getting furious over this for some reason
Cue people making $40k/yr with a 150k mortgage and maybe a small pontoon getting furious for some reason.
Headlines like this pain me, and they do it on purpose I swear.
People see "wealthy" and worry that might be them, without ever seeing the detail that the first 10 million dollars is completely untaxed.
father of conservatism Adam Smith on taxes/estate tax/ inheritance tax / generational wealth:
“A power to dispose of estates forever is manifestly absurd. The earth and the fullness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural. There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death.”
“It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
Adam Smith was a filthy communist by today's Capitalist standards. The Chicago school of economists would probably burn him at the stake as a witch.
Make it 99% for anything over $20,000,000.
Maybe we'd have fewer "Trumps" running for president.
I can't wait to my conservative christian family that make 40k a year to argue against this.
>Consider, for example, an entrepreneur who started a business decades ago that’s now worth $100 million...\[u\]nder Biden’s plan, the family would immediately owe a capital gains tax of $42.96 million upon death, reflecting the capital gains rate of 39.6%, plus the net investment income tax of 3.8%, minus the $1 million exemption, according to the Tax Foundation.
People who know how rich money works - assuming zero estate planning or loopholes, how would this tax actually be paid if the new owners don't have that amount of liquidity?
By borrowing against their wealth, like tons of wealthy people already do all the time anyway. This is particularly true of wealthy people in the exact situation you're talking about: high net worth, concentrated in a single business or other illiquid asset that they expect to make money in the long run, but can't easily have value extracted from it without hurting that future earning potential. This is why Elon Musk took out $50M+ in new mortgages in late 2018 when his net worth was over $20B, for instance. [This page from UBS](https://www.ubs.com/global/en/wealth-management/chief-investment-office/life-goals/liquidity-longevity-legacy/2021/borrow-benefits-and-considerations.html) marketing loans to high-net worth, low-liquidity people walks through some of the reasons that this is already a super common practice pretty well.
This article is fucking amazing>
People who have over 100 million dollars in inherited wealth may have to pay more taxes and this is terrible for them.
The highest marginal tax rate was 70% in 1980. 77% in 1964. Don't let people trick you into thinking the highest marginal tax rate was always below 40%. Don't let people trick you into thinking that the rich will have all of their income taxed at the same rate. That is NOT how marginal tax rates work.
Back when national debt was decreasing.
I can't wait to hear my old white guy acquaintances crying about how the "death tax" will steal 60% of their $150K estate.
Lucky them! Not a bad problem to have if you ask me.
And they still won’t have paid their share historically.
Not nearly enough. Take it to 90%
As someone who plans to eventually inherit $10,000,000 from a relative I haven’t met or heard of I am LIVID
Super concentrated wealth is bad for democracy and the common good.
Okay, good. I like what Joe Biden is doing.
My SO told me the investment account I inherited from my dad wll be under these taxes...but I definitely don't have enough zeroes to worry about anything. I WISH this was going to be a thing for me, but then I'd welcome it. Woohoo! I helped to build a bridge!
>Consider, for example, an entrepreneur who started a business decades ago that’s now worth $100 million
oh a poor family business owner. lol. And the logic does not follow at all. Right now there is a step up, so instead of owing on the gains from the investment, it's only from the death. At death, don't make the taxes due, just don't change the basis. So once the investment is sold, all of the tax is due.
If you think this will actually happen you are not very familiar with America.
These Uber rich will wind up “giving” their money to a foundation or their own personal non-profits like some do already. Their kids, and kid’s kids, will likely work “part time” for the foundations. No way these super rich are gonna be okay giving their billions to the government.
Tax the shit out of their offshore bank accounts .
Its a negotiation tactic. Better to ask for 61 and get 30 rather than ask for 30 and get 15.
Oh no! Anyway.
Love this idea.
“Freeloaders taxed too little in Biden’s new plan” is how this title ought to read.
Edit: fixed typo
Good ... fuck em
My only hope is that it's taxed on the individual receiving the wealth, and there's a minimum (say 50 years of full time federal minimum wage) where it's 0% inheritance tax to encourage spreading inheritance among many people instead of concentrating it among one or two.
50 years full time minimum wage is about $800,000 so let any inheritance received per person (cumulative over their life) be 0% up to that point. Over that then the tax grows steadily to 72% when it's 150 years of full time federal minimum wage (~$2.5 million). If minimum wage is increased, then these numbers raise.
My opinion is that a person leaving $5 billion to 10,000 is much better for the economy than $5 billion to 1 person, and the former 10,000 people should not be taxed anywhere near (if at all) what one person getting all $5 billion should be taxed.
you realize that the tax on estates doesn't kick in until it's over several million.
Good. Republicans are all talk about how working hard and you'll get ahead, yet for inherited wealth, the inheritor didn't do a damn thing except be born into the right family.
Billionaire scampi, boiled billionaire, billionaire cocktail, steamed billionaire, butterfly billionaire,...
Oh man... those poor trust fund kids.
Good. With $7 trillion in unpaid taxes they fucking better.
I can't think of any group I feel less concern for than those who inherit dynastic wealth. They'll be fucking fine.
I actually have some sympathy for the argument that taxing inheritance is a bit gruesome, and even overly individualistic, emphasizing as it does the individual as meaningful economic actor over the family or community. My preference would be for wealth to be taxed regularly over a person's lifetime, so these obscene fortunes never accumulate in the first place.
But since that isn't going to happen, yeah, tax the shit out of those estates.
The intent is so that the US doesn’t become a Aristocracy with families of generational wealth becoming a ruling class. But then you have the Bush’s, the Clinton’s, the Kennedy’s, the Koch’s, the Perdue’s, Walton’s, Rockefeller’s, Ford’s and the list goes on and on.
Clearly the old way wasn’t stopping this, because when you have more money than you know what to do with, you can spend it in ways that protect it from the government beyond your death. Giving the wealthy an even easier time of transferring it in their death was definitely a bad decision and these measures are only rolling back the clock a little. This is still a far cry from how taxes were for almost the entirety of the history of the US and our expansion into global power.
Meh. The wealthy will just pass it on at a lower rate before they die.
This is good. However, it would have been better for them to have faced much higher taxes when they were alive so that the wealth could have been made available while it was being earned on the backs of higher worker productivity and lower worker wages.
If you think the extremely wealthy are actually going to pay those taxes you're extremely naïve. They have very good accountants whose job it is to save them the most money possible.
Tax accountants at a much higher rate.
Inherited wealth makes your lineage ugly and stupid.
I work around rich people, and it's like a room full of Matt Gaetz everywhere I go. Sometimes with breasts.
Wait, but for someone with a business worth $100 mil...Let’s say they die and pass it along to their kids. The kids have to come up with a liquid $61 million to pay in taxes right away? That doesn’t seem right at all—they’d need to immediately sell it upon the parent’s death just to afford the taxes. Please tell me I’m wrong?
Inherited stocks aren't taxed like money, I assume ownership of a business is the same. The kids in your example wouldn't need to worry about taxes until they actually decided to sell stock or the entire business.
Edit: This is how it works now, but I didn't read the article carefully enough to see that Biden apparently does want to tax stocks immediately, I read it as if the family sold the business after inheriting it
Koch brothers to their lobbyist army: "BRIBE FASTER, THEY'RE AFTER US"
>“It’s a big number,” said Brad Sprong, KPMG partner and private enterprise tax leader. “That’s why we’re telling our clients to be smart and start preparing now.”
The rich are going to start moving their money around to dodge the new taxes while the republicans continue blocking the bill for as long as they can to buy them time.
Do it. Pull the trigger.
Cant wait to here fucker carlson cry about it.
And sooo to tucker knucklehead inheritance will be effected?? You bet these people will scream. And loudly!!! They will not like it. Yet have you seen them personally assisting at food shelves or delivering meals to seniors, assistance to a single parent with child care so they can work.... no.
Rest assured the wealthy will spout.
I had to pay capital gains as a maybe low middle income person post divorce.
We all , they as well need to pay fare share that others already do.
I’m fine with this
Why not higher. Soak the rich
This doesn't affect you unless you make more than $10 million.
And you know what? They will still be wealthy!
No kidding. They will still be wealthy.
If we are a country of 'pulling yourself up by your boot straps' then hell yeah the inheritance tax should go up. Also, if businesses are people they should have to pay taxes at the same rate as an actual person.
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