Joe Biden says there will be no tax hikes for the middle class. Only the wealthy will pay more. It’s the same tired line that everyone knows is a lie. Given the ruinously expensive agenda that the Left wants to enact, the only logical way to pay for it is for EVERYONE’s taxes to go up. Does anyone really think the super-wealthy can fund a single-payer system for everyone? And that’s just one item in their left-wing goodie bag from hell. Well, Kelly Johnston wrote an op-ed for InsideSources to explain one tax hike that will wreck the middle class and noted how retirement accounts and pensions could be next:
You will be told that the tax plan only taxes the wealthy. Untrue. Corporations do not ultimately pay taxes – they collect them. Their “promise” won’t include intergenerational transfers of property and assets, like houses, family businesses, family farms, and stock.
Meet stepped-up basis. 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.
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 Biden plan may exempt the first $1 million of “unrealized” gains, but that’s a shallow threshold for many family businesses and farms. And it is not just homes or beach property. It includes stocks and family businesses.
Being allowed to keep your or your family’s own money is now a “tax loophole.”
Whose money do the Democrats think we’re talking about? They seem to think all money is the government’s, and they’re letting you keep some of it. They clearly believe that they can spend it better than you. It doesn’t take long before that extends into other private property. Your pensions and IRAs may be next.
The publication also notes that Senate Republicans are virtually powerless to stop this tax push from Democrats since budget and reconciliation rules allow for a simple majority to pass legislation. This is one of those taxes that will not be broadcast or known to most until it’s too late if this becomes law. Johnston adds this tax hike push very much aligns with the notion that government thinks our money is their—and they know how to spend it better.
A long time ago, when George Will wasn’t on the outs among the GOP base, he delivered a speech at the Reagan Dinner at CPAC in 2010, where he noted the oddity regarding the death tax. You can surely be irresponsible and blow all your savings in Vegas, but if you try and keep something for your family after you’ve died—the government takes a chunk of it. It’s all par for the course regarding Democrats now regarding taxes and spending. At the same time, this is what voters wanted. I don’t want to hear it from Biden supporters who are about to be potentially screwed by this hike.
Sources: TownHall: So, That’s How Biden Intends to Tax the Middle Class