Displaying items by tag: stepup basis
Advisors and their clients have spent much of this year worrying about Biden’s tax plans. Two of Biden’s budgetary priorities to raise tax revenue fall squarely on the wealthy: nearly doubling capital gains taxes and the elimination of the step-up in basis in inheritance. Well, speaking on condition of anonymity, according to Bloomberg, Washington insiders are saying the elimination of step-up in basis (often panned as a “death tax” by critics) seems be heavily watered down, or maybe dead altogether. The proposal received heavy opposition and Democrats may have already backed away from its inclusion in the budget plan, or may go with a heavily diluted proposal.
FINSUM: So there is also a big knock-on effect here as well—it means the Democrats likely won’t hike the capital gains taxes to 28% or more on the wealthy, as hiking it much without having eliminated the step-up in basis will likely end up costing the government money.
Advisors, try to breathe just a tiny sigh of relief, your clients just got a victory. It is being reported by prominent political paper The Hill that big Washington lobbyists have already succeeded in greatly watering down Biden’s tax plans, and perhaps eliminating their chances. Evidently lobbyists have done very well at getting middle of the road Democrats to turn against Biden’s tax plans. Biden’s plans include increasing long-term capital gains taxes to regular income tax levels and eliminating the “step-up in basis” at death in inheritance.
FINSUM: This has two clear effects on Biden’s plan. Firstly, because the numbers are so tight, Biden can’t afford to lose anyone from his party in a vote. Secondly, and relatedly, this means the middle of the road Democrats have a lot more power to shape the proposal that makes it to a vote.
Advisors and their clients have spent the whole summer dreading Biden’s tax plans. Two of Biden’s budgetary linchpins for raising taxes on the wealthy are: nearly doubled capital gains taxes and the elimination of the step-up in basis in inheritance. Until now, they had merely been proposals. However, yesterday the House Democrats passed a budgetary resolution to bring a full vote on the topic. It is expected to pass along party lines.
FINSUM: The Democrats have a very narrow path to getting this passed as part of their $3.5 tn spending package. However, if they can get every Democrat in the Senate to sign, it becomes a reality.