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Thread: US Tax reform - tax cuts for the rich. The middle class, not so much.

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  1. #1
    practical experience, FTW MaeZe's Avatar
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    US Tax reform - tax cuts for the rich. The middle class, not so much.

    There'll be a lot to say about this proposed tax reform in the next few weeks/months. I'm going to start by addressing the big lie about inheritance taxes.

    Once again the Democrats are blowing an opportunity to frame the estate tax debate. The Republicans call it double taxation (supposedly income that has already been taxed) and the death tax, because painting it as evil sounds good.

    In reality the vast majority of the time, inheritance, when one is rich, consists of a large proportion of untaxed capital gains. When the heirs sell those assets the basis for capital gains is zeroed out at the time the wealth is inherited. So were the assets to be cashed out before the rich person dies, there would almost certainly be a huge capital gain, and that would be subject to tax the way income is subject to tax (the rates differ).

    But inherit those same assets and all that capital gain is simply passed on with a new valuation and any gain zeroed out. The deceased's capital gains taxes are cleared off the books.

    Come on Democrats, let your legislators know you see through the ruse of the free pass on capital gains tax. One might think rich Democratic legislators are not interested in exposing the tax evasion for what it is, evasion of capital gains taxes. Maybe because they don't represent the 99% quite as enthusiastically as they pretend to.

    The argument is that requiring a large tax on an inheritance forces heirs to have to sell things like the family home and family owned businesses. That is what the very generous exemption on the first six million (or what ever the current exemption is) is for. So that problem has been addressed. It it needs tweaking, fine, but don't pretend the money is being double taxed because none of those capital gains at the time of one's death have been taxed.


    Action: spread the talking points.
    Last edited by MaeZe; 10-02-2017 at 03:30 AM.

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