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My comments: Biden/Harris Death Tax Increase - The current administration, under the Biden/Harris administration, has indeed suggested changes that could effectively increase what is commonly referred to as the "death tax," specifically through proposed modifications to estate and gift taxation.
### Proposed Changes to Estate Tax
1. **Reduction of Estate Tax Exemption**: President Biden has expressed intentions to lower the estate tax exemption levels significantly. Currently, the exemption is set at approximately $11.7 million for individuals and $23.4 million for married couples. Biden's proposals could reduce this exemption to as low as $5 million or even revert to the 2009 level of $3.5 million for individuals, which would affect a larger number of estates[1][2].
2. **Elimination of the Step-Up Basis**: Another significant proposal involves the elimination of the "step-up basis" rule, which currently allows heirs to inherit property at its fair market value at the time of the decedent's death. This means that if an asset appreciates significantly, heirs do not pay capital gains tax on the appreciation that occurred during the decedent's lifetime. Under the proposed changes, the basis would carry over, meaning heirs would inherit the asset at its original purchase price, leading to potentially substantial capital gains taxes if the asset is sold shortly after inheritance[2][4].
3. **Impact on Families and Businesses**: These proposed changes could impose significant financial burdens on families inheriting assets, particularly those with appreciated properties or family-owned businesses and family farms. The potential tax liabilities could force some families to sell assets to cover these new tax obligations, which has raised concerns about the long-term viability of generational wealth transfer[4][5].
### Conclusion
While these proposals are still under discussion and would require legislative approval, they represent a shift towards increasing the tax burden associated with estate transfers. If implemented, these changes could significantly affect how estates are taxed upon death, effectively increasing the financial obligations of heirs.
What's not under discussion is - Social Security Tax: The Social Security tax rate is currently set at 6.2% for employees and employers on earnings up to a CERTAIN CAP of ($168,600 for 2024). Self-employed individuals pay 12.4% on their net earnings up to this cap. This cap has increased over time, which can result in higher contributions. Note that this does not effect the higher incomes above the cap. It does benefit the illegals that the Biden/Harris administration want to use these funds to help those that have not paid a cent into Social Security.
Citations:
[1] https://www.skadden.com/insights/publications/2020/09/quarterly-insights/bidens-tax-proposals-and-estate-planning
[2] https://pbwslaw.com/biden-administration-may-spell-changes-to-estate-tax-exemptions-and-basis-step-up-rule/
[3] https://taxfoundation.org/research/all/federal/biden-budget-2025-tax-proposals/
[4] https://www.forbes.com/sites/leonlabrecque/2021/07/15/the-new-death-tax-in-the-biden-tax-proposal-major-tax-change/
[5] https://waysandmeans.house.gov/2024/03/14/the-biden-tax-hike-will-likely-exceed-7-trillion/
[6] https://itep.org/federal-estate-tax-historic-lows-2023/
[7] https://www.kiplinger.com/taxes/biden-income-tax-on-death
[8] https://www.forbes.com/sites/martinshenkman/2024/03/17/biden-2025-budget-proposal-could-slash-what-your-heirs-get/
### Proposed Changes to Estate Tax
1. **Reduction of Estate Tax Exemption**: President Biden has expressed intentions to lower the estate tax exemption levels significantly. Currently, the exemption is set at approximately $11.7 million for individuals and $23.4 million for married couples. Biden's proposals could reduce this exemption to as low as $5 million or even revert to the 2009 level of $3.5 million for individuals, which would affect a larger number of estates[1][2].
2. **Elimination of the Step-Up Basis**: Another significant proposal involves the elimination of the "step-up basis" rule, which currently allows heirs to inherit property at its fair market value at the time of the decedent's death. This means that if an asset appreciates significantly, heirs do not pay capital gains tax on the appreciation that occurred during the decedent's lifetime. Under the proposed changes, the basis would carry over, meaning heirs would inherit the asset at its original purchase price, leading to potentially substantial capital gains taxes if the asset is sold shortly after inheritance[2][4].
3. **Impact on Families and Businesses**: These proposed changes could impose significant financial burdens on families inheriting assets, particularly those with appreciated properties or family-owned businesses and family farms. The potential tax liabilities could force some families to sell assets to cover these new tax obligations, which has raised concerns about the long-term viability of generational wealth transfer[4][5].
### Conclusion
While these proposals are still under discussion and would require legislative approval, they represent a shift towards increasing the tax burden associated with estate transfers. If implemented, these changes could significantly affect how estates are taxed upon death, effectively increasing the financial obligations of heirs.
What's not under discussion is - Social Security Tax: The Social Security tax rate is currently set at 6.2% for employees and employers on earnings up to a CERTAIN CAP of ($168,600 for 2024). Self-employed individuals pay 12.4% on their net earnings up to this cap. This cap has increased over time, which can result in higher contributions. Note that this does not effect the higher incomes above the cap. It does benefit the illegals that the Biden/Harris administration want to use these funds to help those that have not paid a cent into Social Security.
Citations:
[1] https://www.skadden.com/insights/publications/2020/09/quarterly-insights/bidens-tax-proposals-and-estate-planning
[2] https://pbwslaw.com/biden-administration-may-spell-changes-to-estate-tax-exemptions-and-basis-step-up-rule/
[3] https://taxfoundation.org/research/all/federal/biden-budget-2025-tax-proposals/
[4] https://www.forbes.com/sites/leonlabrecque/2021/07/15/the-new-death-tax-in-the-biden-tax-proposal-major-tax-change/
[5] https://waysandmeans.house.gov/2024/03/14/the-biden-tax-hike-will-likely-exceed-7-trillion/
[6] https://itep.org/federal-estate-tax-historic-lows-2023/
[7] https://www.kiplinger.com/taxes/biden-income-tax-on-death
[8] https://www.forbes.com/sites/martinshenkman/2024/03/17/biden-2025-budget-proposal-could-slash-what-your-heirs-get/
Biden's Plans to Impose an Income Tax on Death
Posted from kiplinger.comPosted in these groups: 
Political Opinions
Political Opinions
Edited 3 mo ago
Posted 3 mo ago
Responses: 5
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LTC Kevin B.
SPC Jeff Daley, PhD - If someone is given a business for free, yes I think they should pay taxes on it.
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SPC Jeff Daley, PhD
LTC Kevin B. - Perhaps the Biden/Harris administration is looking at Venezuela as their model for the death tax and future high taxes. The higher taxes will have a high impact on disposable income for the lower and mid income earners.
Yes, Venezuela has a death tax, commonly referred to as the estate and gift tax. This tax is applied to inheritances and gifts, with rates varying based on the value of the inheritance and the relationship between the deceased and the beneficiary.
### Tax Structure
1. **Categories of Beneficiaries**:
- **Category I**: Spouse, direct ascendants, direct descendants, and adopted children.
- **Category II**: Siblings, nephews, and nieces.
- **Category III**: Uncles, aunts, and first cousins.
- **Category IV**: Any other person.
2. **Tax Rates**:
- The tax rates range from **1% to 55%**, depending on the value of the inheritance and the degree of kinship. Higher rates apply to more distant relatives and non-relatives[2][3][4][5].
3. **Taxable Amount**:
- The taxable inheritance is calculated by deducting debts, funeral expenses, and attorney fees from the gross estate value[3][4].
Overall, the estate and gift tax in Venezuela is a significant consideration for beneficiaries, as it impacts the net value they receive from an inheritance.
Citations:
[1] https://taxfoundation.org/research/all/federal/estate-and-inheritance-taxes-around-world/
[2] https://en.wikipedia.org/wiki/Inheritance_tax
[3] https://www.globalpropertyguide.com/latin-america/venezuela/inheritance
[4] https://taxsummaries.pwc.com/venezuela/individual/other-taxes
[5] https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Venezuela.pdf
[6] https://taxsummaries.pwc.com/quick-charts/inheritance-and-gift-tax-rates
[7] https://files.taxfoundation.org/legacy/docs/TaxFoundation_FF458.pdf
[8] https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TBB-Venezuela.pdf
Yes, Venezuela has a death tax, commonly referred to as the estate and gift tax. This tax is applied to inheritances and gifts, with rates varying based on the value of the inheritance and the relationship between the deceased and the beneficiary.
### Tax Structure
1. **Categories of Beneficiaries**:
- **Category I**: Spouse, direct ascendants, direct descendants, and adopted children.
- **Category II**: Siblings, nephews, and nieces.
- **Category III**: Uncles, aunts, and first cousins.
- **Category IV**: Any other person.
2. **Tax Rates**:
- The tax rates range from **1% to 55%**, depending on the value of the inheritance and the degree of kinship. Higher rates apply to more distant relatives and non-relatives[2][3][4][5].
3. **Taxable Amount**:
- The taxable inheritance is calculated by deducting debts, funeral expenses, and attorney fees from the gross estate value[3][4].
Overall, the estate and gift tax in Venezuela is a significant consideration for beneficiaries, as it impacts the net value they receive from an inheritance.
Citations:
[1] https://taxfoundation.org/research/all/federal/estate-and-inheritance-taxes-around-world/
[2] https://en.wikipedia.org/wiki/Inheritance_tax
[3] https://www.globalpropertyguide.com/latin-america/venezuela/inheritance
[4] https://taxsummaries.pwc.com/venezuela/individual/other-taxes
[5] https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Venezuela.pdf
[6] https://taxsummaries.pwc.com/quick-charts/inheritance-and-gift-tax-rates
[7] https://files.taxfoundation.org/legacy/docs/TaxFoundation_FF458.pdf
[8] https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TBB-Venezuela.pdf
Estate and Inheritance Taxes around the World
The U.S. is one of many countries that levies taxes on estates or inheritances. Of all America’s taxes, the estate tax is perhaps the most contentious.
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LTC Kevin B.
SPC Jeff Daley, PhD - I don't care about tax rates in Venezuela, but thanks for dragging into the discussion an irrelevant scare tactic. The US will not become Venezuela, regardless of who wins the election, and regardless of any tax policy they implement.
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SPC Jeff Daley, PhD
LTC Kevin B. - This situation is comparable to the path we are currently following. Historical evidence corroborates this perspective. Examining established facts is not intended to instill fear; rather, it pertains to pertinent information related to the discourse. If you find yourself unsettled by the examination of these facts, it may indicate a need for reflection, provided you are open to engaging with this matter intellectually.
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