Republicans and the American people have been strongly opposed to the Democrat “death tax” for decades. Most Americans despise the idea of taking someone’s wealth after they’ve died, but that hasn’t prevented Democrats from extorting money from the estates of the departed.
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According to the National Review, the death tax has decreased from 55% to 40% over the last century, but the Biden administration looks to desire more.
That’s right: the Biden administration wants to tax you or a loved one who has passed away.
The following is an excerpt from the National Review report:
The “norms-restoring” Biden administration is now proposing to double down by introducing a new, parallel death tax to complement the existing one that no one likes.
The Biden administration proposes that, in addition to the existing estate tax, the federal government levy a new tax on the deceased’s most recent 1040 personal income tax return. Tens of millions of Americans would be affected by this new tax.
All unrealized capital gains (gains on unsold real estate, family farms and companies, stocks and other investments, artwork, collectibles, and so on) would be taxed as if the assets in issue had been sold that year under the administration’s plan. The new tax would exempt the first $1 million in unrealized profits ($2 million in the case of a married couple).
Gains from the sale of a principal house would also be excluded up to a specific point ($500,000 for a married couple, half that for others). Finally, the administration has stated that “going concerns” in family farms and companies would be exemplified.
In other words, the Biden administration wants to tax capital gains on a person’s property when they die, even if the assets that account for those profits haven’t been sold yet.
This is inherently unfair because potential income from a house or a stock is not real income on which one owes taxes until the property is sold and cash is received. (For example, you don’t have to pay income tax on the increase in the value of your home each year.)
To make matters worse, the government advocates boosting the top long-term capital gains tax rate from 23.8 percent to 43.4 percent. When state capital-gains taxes are added in, the overall rate rises to 50 percent or higher.
Not only that but there’s more. After the new 50 percent double death tax is applied to these unrealized, unsold phantom gains, the old death tax is still to cope with. Consider a 50 percent death tax followed by a 40 percent death tax on the remainder. Karl Marx advocated for asset confiscation after death, but he probably never imagined it would be this huge.
Of course, this 50 percent double death tax would apply to any capital gains over the exclusion level, including those resulting solely from inflation. A middle-class family who bought a vacation property for $100,000 in 1980 and has seen its worth rise to $500,000 now understands that a large portion of that growth is due to inflation.
To put it another way, the Biden administration wants to tax capital gains on a person’s property when they die, even if the assets that generated the income haven’t been sold yet.
This is intrinsically unfair because anticipated income from a house or stock is not real income on which taxes must be paid until the property is sold and cash received. (You don’t have to pay income tax on the annual growth in the value of your home, for example.)
To add insult to injury, the administration proposes raising the top long-term capital gains tax rate from 23.8 percent to 43.4 percent. When state capital gains taxes are included, the final rate can reach 50% or greater.
It’s terrible enough that we have a death tax. A second death tax would be a colossal blunder.