A new report claims that the Biden administration has already dropped an important tax hike from the “economic plan” that President Joe Biden is set to reveal on Wednesday evening during an address to a joint session of Congress.
If this proves to be true, leftists in and out of the government are going to be very worried that Biden is starting to back off of his promise to drain the rich of cash through taxation and pay for investments in infrastructure.
President Biden is also expected to present a new slate of tax increases designed to pay for the massive expansion in federal programs, including a tax hike on most Americans making more than $400,000 per year and a capital gains tax increase on individuals earning more than $1 million.
One element that will be noticeably absent from Biden’s plan: an estate tax hike. Although the White House has suggested Biden would raise the estate tax — and then-presidential candidate Joe Biden campaigned on the issue — sources close to the president’s core economic team told Bloomberg News that the administration has dropped the idea, at least for now.advertisement — content continues below
“President Joe Biden and his economic team are planning to forgo an expansion of the estate tax in the administration’s coming individual tax-hike proposals, according to people briefed on the plan,” the outlet stated on Wednesday.
“Biden during the 2020 campaign pledged to increase the estate tax, along with raising rates on capital gains and corporate income, as part of an effort to force companies and the wealthy to pay a greater share of federal revenue,” Bloomberg went on to add. “But the estate tax boost won’t be part of the funding measures in the ‘American Families Plan’ the president will unveil Wednesday, the people said, asking not to be named as the plan isn’t yet public.”
“The exclusion of a hike in the estate tax is noteworthy to both progressive groups and liberal economists because Biden had made taxing the rich such a central part of his campaign and presidency — and advocates view an estate-tax hike as one way to dismantle wealth passed along within families that are often not subject to taxation,” the outlet reported.
Apparently, Biden’s team is currently considering a hike in the “step-up basis,” which, according to the Bloomberg report, “allows heirs to use the market value of assets at the time of inheritance rather than the actual purchase price as the cost basis for capital gains when the holdings are sold.”
As it is with most Democrat policies, this will definitely impact the wealthy, but will also place a big burden on the middle class.
“Here’s how that works. Say you’re a 60-year-old almost-retiree whose 90-year-old parent just passed away. You are bequeathed their Florida home acquired in 1980 for $100,000. Its value is now $500,000. Hopefully, it won’t be complicated by a reverse mortgage or isn’t burdened by other forms of leveraged debt. You sell it for $500,000. Thanks to ‘stepped-up basis,’ you should owe no federal capital gains tax on the sale,” the DW report says.
“But what happens if all this happens after Democrats eliminate this so-called “loophole?” You’ll owe capital gains taxes on the gain in value since the property was purchased 41 years ago, most of which is probably inflation. That’s a likely 20 percent tax hit on the “gain” of $400,000 – some $80,000 to Uncle Sam. For people with incomes over $1 million, Biden may raise Capital Gains taxes to match the highest personal income tax rate of 39.5 percent,” the report continues.
This is all very bad. That’s the big takeaway. Sure, we all knew already this was going to be a horrible idea. But it’s actually worse than previously imagined, if you can fathom that.
It’s a wealth redistribution scheme. Plain and simple. This is socialism. The threat this poses to our nation cannot be overstated.