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The Biden White House has bad news for Americans hoping to avoid high taxes — the “Double Death Tax.”
The National Review reports this essentially amounts to “a second estate tax.”
And the one we already have is bad enough.
Republicans have fought for years to “kill the death tax.”
Polls indicate the death tax is viewed by Americans as the most unfair.
Democrats have actually agreed in the past and assisted in reducing the death tax. It’s dropped from 55 percent to 40 percent throughout the past century.
However, the Biden administration hopes to not only restore higher rates, but double down by create a “new, parallel death tax to go alongside the old one no one likes,” the report adds.
Here’s how it would work via The National Review:
The Biden administration proposes that on top of the old death tax, which is assessed on estates, the federal government should add a new tax on the deceased’s last 1040 personal-income-tax return. This new, second tax would apply to tens of millions of Americans.
Under the administration’s plan, the year someone died, all of their unrealized capital gains (gains on unsold real estate, family farms and businesses, stocks and other investments, artwork, collectibles, etc.) would be subject to taxation as if the assets in question had been sold that year.
The first $1 million of unrealized gains ($2 million in the case of a married couple) would be exempt from the new tax. In addition, up to a certain point ($500,000 for a married couple, half that for others), gains derived from the sale of a primary residence would be exempted. Finally, the administration has said in the vaguest terms that “going concerns” in family farms and businesses would be exempt, but no one knows how that would work or believes it’s anything more than politically expedient hand-waving.
In short, what the Biden administration is proposing is to tax the capital gains on a person’s property when they die, even if the assets that account for those gains haven’t actually been sold. By itself, this is deeply unfair, because potential income from a house or a stock is not real income one owes taxes on until a sale happens and one has cash in hand. (You don’t pay income tax on the growth in your home’s value every year, for example.)
But to make matters worse, the administration also supports raising the top tax rate on long-term capital gains from 23.8 percent to 43.4 percent. When state capital-gains-tax rates are factored in, this would make the combined rate at or above 50 percent in many places — the highest capital-gains-tax rate in the world, and the highest in American history.
