President Obama himself took the time to tweet the latest Gallup-Healthways survey, which reported that 12.3 percent of respondents were uninsured, down from 12.9 percent in 2014.
Never mind that employer-based coverage has dropped, while Medicaid coverage has grown, and that many ObamaCare policies are heavily subsidized. If he thinks billions spent on a 0.6% reduction of the uninsured is money well spent, who are we to disabuse him?
This this morning we learned our economy created 223,000 new jobs last month. The unemployment rate ticked down again to 5.4%, lowest it’s been in almost seven years.
That’s 3 million new jobs in past 12 months, nearly the fastest pace in over a decade. All told in 62 months in a row, America’s businesses created 12.3 million new jobs. I should add by the way, 62 months ago is when I signed the Affordable Care Act so obviously it hasn’t done too bad in terms of employment in this country. Just thought I’d mention that.
Since there are a lot of predictions of doom and gloom, I suggest those making those predictions go back and check the statistics. Just saying.
I’m pretty sure I had a bowel movement 62 months ago. I think that’s had more to do with job creation than ObamaCare. But my BM has had nothing to do with the labor force participation rate (down over two percent) and the employment population ratio (up barely half a percent) over the past 62 months. If you’re going to start measuring from the depths of the Great Recession, you can make even a BM like the ACA look good.
The Senate’s top investigative committee has launched an inquiry into the system that’s supposed to ensure ObamaCare tax credits go to the right customers for the right amounts — amid concerns that many Americans are getting inflated or improper subsidies.
Sen. Rob Portman, R-Ohio, who is leading the investigation, says because of the confusion with the system, millions of Americans are learning after the fact they inadvertently got too much money and now owe the IRS hundreds.
“I’m concerned that the subsidy eligibility process is so complicated that many consumers believed they were receiving cheaper insurance coverage than they ultimately got,” Portman said in a statement.
Portman also cited two investigations into the government’s income-verification systems. The Government Accountability Office said in 2014 its investigators secured subsidies using false identities in 11 out of 12 undercover attempts. Also last year, an HHS inspector general report found the department “did not have procedures or did not follow procedures to ensure” against government overpayments.
Committee investigators also point to an analysis by H&R Block that found almost two-thirds of its filers receiving an ObamaCare tax credit owed the government at the end of the year. On average, those filers were required to repay more than $700 of their ObamaCare subsidies. The study found most customers claiming the credits were confused about the requirements.
“The Administration assured Congress that the eligibility verification process for the exchanges was working, but millions of Americans are now learning that they received overpayments that they have to repay,” Portman said.
Others might have received credits in error because of poor system safeguards, and Portman noted the risks “wasting billions in hard-earned tax dollars.”
Catching only one out of twelve fake identities; leaving two out of three tax filers with a bill; ObamaCare is giving “close enough for government work” a bad name.
George Soros may soon face a monumental tax bill — of nearly $7 billion — after years of playing hard-to-get with the IRS.
Despite Soros having advocated for higher taxes on the wealthy, the liberal billionaire reportedly has delayed paying his own for years thanks to a loophole in U.S. law.
That loophole was closed by Congress in 2008. But before that, Bloomberg reports, Soros used it to defer taxes on client fees. Instead, he reinvested them in his own fund, and they grew tax-free.
Bloomberg, citing Irish regulatory filings, reported that Soros has made $13.3 billion in this way. Factoring in the various tax rates that would apply, one tax expert estimated this would leave Soros with a roughly $6.7 billion bill.
According to Bloomberg, Soros moved assets shortly before the change to Ireland, seen as a possible shelter from the law. But tax attorneys told Bloomberg they don’t know of a way for money managers to avoid the bill in 2017.
Soros incorporated a new company in tax-favored Ireland (our favorite offshore whipping boy of late) a week before the law was signed – and he transferred the deferred fees to the new company. Since the company was subject to tax in Ireland, the company paid just $962 in tax in Ireland on $3,851 of net income through 2013 (this from Irish regulatory findings as reported by Bloomberg ). The rest of the 7.2 billion of operating income was allocated to investors.
In 2014, Soros shut the company down and moved those deferred fees to another company in the tax-favored Caymans. (Sensing a pattern here?)
By the time the new company in the Caymans was set up, Soros had reportedly deferred $13.3 billion in fees. If tax on those fees actually does come due in 2017, as it should by statute, Soros’ tax bill would hit nearly $7 billion.
It’s a curious position, however, for the man who told CNN’s Zakaria in 2012 that he supported higher taxes on the wealthy, including the so-called “Buffett Rule” named after fellow billionaire Warren Buffett because “if you have better distribution of income, the average American will be better off.”
Curious indeed. We already knew Soros was one smart cookie. But so smart as to hornswoggle the Feds out of almost $7 billion (roughly the GDP of Kosovo)?
I jest, of course. I salute anyone for winning the game, especially the tax game. If you did build that, you did earn that. It’s no one else’s—certainly not the government’s—no matter how “deserving” they may be, unless you deem it so.
And to Soros’s credit, he often deems it so:
I suspect we’ll see some more musical chairs before all of this finally shakes out in 2017. It’s been suggested that Soros might donate some of the funds to his charitable foundations, including his Open Society Foundation – subject to the limits on charitable deductions, of course. His charitable donations to date have totaled more than $7 billion.
A rock of consistency, I believe tax deduction for charitable contributions is the only deduction that belongs in a responsible tax code. Forget about trying to engineer society with mortgage deductions and whatnot. Eliminate all deductions, make the tax code as simple (and the rates as low) as possible, and let people budget best how to spend, save, invest their money.
But charitable contributions are different. First, we are a charitable people: trust us to support with our wallets what our mouths say we believe in. Harness and encourage our innate philanthropy. Second, it is money we take away from a wasteful and unresponsive federal government and give directly to a cause we believe in. One hundred cents of every dollar, not the spare change and pocket lint the feds have left after their taste. You want to house the homeless? There’s a charity for that (many). Feed hungry children? Save rhinos? Support public radio? Promote adoption over abortion? Left, right, or center, you can contribute directly to the causes most important to you, and thank the federal government for subsidizing the cost. It’s democracy, and it’s beautiful. Even for a hypocritical Socialist like Soros.
PS: Out of curiosity, I searched for similar tales of right-wing tax dodging, but the pickings are slim. Everyone knows about Harry Reid’s most un-Christian slandering of Mitt Romney on the floor of the Senate. (He recently confessed, but did not atone for, his lie.)
Koch Industries’ tax returns became the subject of controversy when, in an August 2010 briefing with reporters on a newly released tax-reform report, Goolsbee claimed that the company paid no corporate-income taxes. “We have a series of entities that do not pay corporate income tax,” he said, “some of which are really giant firms — you know, Koch Industries, I think, is one, is a multibillion-dollar business…”
Goolsbee’s assertion raised the eyebrows of a half-dozen GOP lawmakers, who subsequently called on Treasury Department inspector general J. Russell George to investigate whether Goolsbee had accessed the company’s tax returns in violation of federal law. In a letter to George, Grassley and his colleagues said they were “very concerned” by Goolsbee’s remarks. “The statement that Koch is a pass-through entity implies direct knowledge of Koch’s legal and tax status, which would appear to be a violation of section 6103,” they wrote, referring to the section of the Internal Revenue Code that protects the confidentiality of tax returns and all related information. George agreed to investigate.
Goolsbee tells National Review Online that his statement was nothing more than a slip of the tongue. He readily concedes that the company pays corporate taxes. “I certainly never saw any private information about their tax returns,” he says. “That I was in error ought to make that particularly obvious.”
Sheldon Adelson makes no secret of his disdain for the estate tax.
“How many times do you have to pay taxes on money?” the casino magnate asks, leaning on a blue cane on the cobblestones of Wall Street on a crisp October morning.
Precisely. Personal, corporate, or capital gains, his wealth has already been taxed. Double taxation is like double jeopardy—unfair.
And increasingly uncommon:
By shuffling his company stock in and out of more than 30 trusts, he’s given at least $7.9 billion to his heirs while legally avoiding about $2.8 billion in U.S. gift taxes since 2010, according to calculations based on data in Adelson’s U.S. Securities and Exchange Commission filings.
Hundreds of executives have used the technique, SEC filings show. These tax shelters may have cost the federal government more than $100 billion since 2000, says Richard Covey, the lawyer who pioneered the maneuver. That’s equivalent to about one-third of all estate and gift taxes the U.S. has collected since then.
How can it be said to have “cost the federal government” anything when it’s not the federal government’s money? The truth is the technique has saved American taxpayers $100 billion. Which is as it should be.
Touré Neblett, co-host of MSNBC’s The Cycle, owes more than $59,000 in taxes, according to public records reviewed by National Review.
In September 2013, New York issued a state tax warrant to Neblett and his wife, Rita Nakouzi, for $46,862.68. Six months later, the state issued an additional warrant to the couple for $12,849.87.
MSNBC’s hosts and guests regularly call for higher taxes on the rich, condemning wealthy individuals and corporations who don’t pay their taxes or make use of loopholes. But recent reports, as well as records reviewed by National Review, show that at least four high-profile MSNBC on-air personalities have tax liens or warrants filed against them.
Last month, New York filed a $4,948.15 tax warrant against Joy-Ann Reid, who serves as managing editor of theGrio.com and until earlier this year hosted MSNBC’s The Reid Report, and her husband, Jason. Reid has called taxes on the wealthy “a basic fairness argument,” also arguing for “smart spending and smart tax increases” to create economic growth.
Last week, the Winston-Salem Journal reported that Melissa Harris-Perry, who hosts an MSNBC show named after herself, and her husband, James Perry, owed around $70,000 in delinquent taxes, according to a federal lien filed in April 2015. Harris-Perry told the newspaper that she and her husband had made a $21,721 payment toward that debt on Tax Day.
Meanwhile, Al Sharpton’s tax problems have been the subject of extensive coverage by National Review and other publications. In November, the New York Times estimated that Sharpton and his entities owed as much as $4.5 million in taxes, penalties, and interest, a sum the MSNBC host disputes.
By my rough estimation, four MSNBC hosts owe the American people, folks, $4.635 million. I acknowledge their commitment to presenting hosts of color on the network, but are there no candidates who are current on their tax liabilities?
I don’t care how pretty you are, Melissa. Pay up. Okay, ten percent off for being easy on the eyes.
Check that: let’s make Al Sharpton pay the difference.
…In its discussion plan for the Digital Single Market unveiled last month, the European Commission noted that “the cost and complexity of having to deal with foreign tax rules are a major problem for [small companies],” and it pegged annual VAT compliance costs at €80 billion. Compliance is especially burdensome for smaller firms that must cope with up to 28 different VAT regimes in the European Union.
Consider a small firm in Italy selling a product to customers in France, Spain and Romania. Figuring out to whom to pay VAT is the first challenge. If the Italian firm sells only a few products outside Italy, it will pay VAT to Rome. But if its sales to another country exceed a threshold, the Italian company has to register to pay VAT in the destination country. That threshold is different everywhere. The Italian could sell products worth €100,000 in France each year before having to pay French VAT, but sales above €35,000 require payment of Spanish VAT, while in Romania the limit is 118,000 Romanian leu (€27,000).
Then a business needs to determine how much VAT to pay. Standard rates range from a low of 17% in Luxembourg to a high of 27% in Hungary, and each government exempts or reduces rates on different products. If the Italian company sells books, it will owe reduced rates of 4% in Spain and 9% in Romania. It will pay a reduced rate of 5.5% for books shipped to France—but starting next year, it will owe the full VAT of 20% on any books it sells in electronic form.
If a German machine-tool firm is lucky, its customer in Britain will be a company with its own UK VAT registration, which will pay VAT on the purchase. But if the German company stores parts on consignment in a British warehouse to be closer to the customer, who pays and how much will depend on how much “control” each party has over the merchandise in storage. And good luck figuring out your VAT liability if Company A in Portugal, Company B in Poland and Company C in Denmark engage in a quick-fire chain transaction.
More at the link, including this brilliant sentence: “One lesson is that governments are hungrier for revenue than they are for cross-border trade, which helps explain why e-commerce struggles in the EU.”
Terrific, isn’t it? If Belgium has 27 tons of mustaches to sell, and must pay a 17% tax on the 20% they sell to Germany, a 30% tax on the 15% they sell to Greece… how fast is the airplane flying to Reykjavik? And when will the days be longer in Iceland than they are in Freeport, Maine?
Paul Krugman and Matt Yglesias criticized the chart [above] because, according to them, it does not give a complete picture of the tax burden borne by Americans because it only includes the federal income tax.
Since the rich pay a higher share of federal income taxes than of total federal taxes, they argued we were misleading by making it look like the rich pay a higher share of taxes than they do.
In those responses, we showed we weren’t being misleading because we make plain the chart includes only federal income tax. Furthermore, examining the federal income tax makes sense because President Obama has long wanted to raise it on the rich.
We also agreed that it made sense to look at the total federal tax burden, in addition to federal income taxes, to offer additional context to the debate.
In that spirit, here is a new chart that shows the burden of all federal taxes, including individual income, corporate income, payroll, excise and other miscellaneous taxes:
It still shows the same story: Top earners pay a disproportionately large share of the federal tax burden.
The top 10 percent pays 53.3 percent of all federal taxes. When looking at just federal income taxes, they pay 68 percent of the burden.
The top 1 percent pays 24 percent of all federal taxes compared to 35 percent of all federal income taxes.
The Heritage Foundation takes pains to write that…
Neither chart makes a judgment on whether those top earners pay too much or if they should pay more. The purpose of the original chart and this one is simply to give the American people facts.
But I will judge. If there is a concept of “fair share”, what’s fair about the numbers quoted above? As Joe One-Percenter (all the rich have hyphenated names, don’t you know), I earn 15% of the nation’s income, but bear 24% of its tax burden. By my reckoning, I pay 60% more (9/15ths) than I should. That’s fair?
You may think it’s fitting and proper, but in no dictionary does it define fair.
What the Left never understands is that it’s not their money. It’s not. Some people, by dint of hard work, good fortune, or even dumb luck, have more money. It’s not yours, not mine. They have to pay taxes on that money (income, payroll, corporate, capital gains, whatever), and they do—some pay more in taxes than we’ll ever earn. But they don’t have to pay more than “their fair share” just because you or I resent their wealth. Which is how the Left feels. And resentment is a terrible way to run a government—just look.
The Left also never understands that the one-percenters are the source of nearly all philanthropy. To schools, arts organizations, religious institutions, social causes. For every conservative David Koch you cite with contempt, I can name a liberal George Soros or Tom Steyer. The one-percenters do good with their money, and it’s not for the government to take it away in the hallucinogenic belief that it can do better. And even those who don’t do good with their money—who splurge on yachts and polo ponies—it’s not yours to take. As I’m sure the ship builders and horse breeders would be first to argue.
The economic argument is irrefutable, but I actually think the moral argument is stronger. It’s wrong to take what is not yours, even from someone who has more. Once you commit that sin, we’re just arguing over degree.
This year, ObamaCare is making the least popular day — April 15 — even worse.
For about one in four tax filers, it’s turning out to be a nightmare, with extra paperwork and penalties. And for high earners or anyone selling a piece of property or business, ObamaCare means higher taxes.
If you enrolled in ObamaCare in 2014 and got a subsidy to pay for it, you’re at risk of losing your refund.
Surprise: You may even owe Uncle Sam money. Only 4 percent of people who signed up for ObamaCare got the correct subsidy, so a whopping 96 percent will see their tax bill adjusted, some up and others down.
Who would design a system that’s right only 4 percent of the time?
The question answers itself: the government. This is, and always was, only about the expansion of government. By that measure, it is a runaway success.
The rest of it? It’s like our deal with Iran: a framework, the details of which to be worked out later:
Worse, the IRS sent out bungled subsidy information to some 800,000 filers, and now nearly all of them are being told they’ll have to wait, maybe until Oct. 15, to straighten it out. Too bad if they need their refund to make a mortgage payment.
And good luck getting help from IRS staff. Even IRS Commissioner John Koskinen admits the agency is answering only 43 percent of calls, and that’s after an average of 26 minutes on hold.
No matter what your politics, you’ve got to agree this isn’t working.
To paraphrase our old friends, the Soviets: they pretend we can keep our doctor, and we pretend it’s working.
If you had subsidized ObamaCare coverage in 2014, don’t plan on filing the simple 1040-EZ form. You can’t use that anymore. And in addition to a 1040, you’ll have to fill out new Form 8962, using the information you got in the mail on Form 1095A.
You chose this, Blue America. It’s “the law of the land”. Choke on it.
Palestinian leader Mahmoud Abbas says he has refused to accept hundreds of millions of dollars of tax revenues unfrozen by Israel.
Mr Abbas says he returned the money because Israel deducted a third to cover unpaid Palestinian utility debts.
He has threatened to take Israel to the International Criminal Court (ICC) unless the full amount is released.
Israel says it has deducted the cost of unpaid services provided to the Palestinian population, including electricity, water and hospital bills.
The government made the decision to restart payments two weeks ago but warned at the time that it would make deductions from the transfer.
Israeli Prime Minister Benjamin Netanyahu said at the time Israel would resume payments partly out of “humanitarian considerations”, adding the “deteriorating situation in the Middle East” and rise of extremists required him to “act responsibly and judiciously”.
Speaking at a rally in Ramallah, President Abbas demanded the tax revenues in full.
“We are returning the money. Either they give it to us in full or we go to arbitration or to the ICC. We will not accept anything else.”
On this issue at least, President Obama and Prime Minister Netanyahu are one:
As the April 15 tax deadline nears, people who got help paying for health insurance under President Barack Obama’s law are seeing the direct effect on their refunds — hundreds of dollars, for better or worse.
The law offers tax credits so people without access to job-based health insurance can buy private coverage. Because these subsidies are tied to income, consumers must accurately estimate what they will make for the coming year.
That’s been a challenge for millions of people.
Guess on the low side, get more help now with premiums, but owe money later at filing time. Overestimate income, expect bucks back from the taxman.
Many consumers may not have understood that is how it works when they signed up. Some experts caution that such complications could discourage uninsured people from getting covered.
Rob Tuck of Dublin, California, said he had anticipated a refund of about $400 on his 2014 taxes. But that almost has been wiped out because he had to repay some of the subsidy. He changed jobs during the year, and his income went up a little.
Tuck, who works for a San Francisco area tech-support company, said he enrolled to avoid tax penalties for being uninsured, but feels penalized anyway now.
“I was expecting to get dinged a little bit, but I was actually kind of surprised when it came down that much,” he said.
You can follow Abbas’s example and refuse to take a penny. No such things as free lunch, free health care, or free electricity. Pay your bills.
I like to see people face the consequences of their actions. Even if they never learn—especially if they never learn—their repeated moronism, among Democrats and Palestinian Arabs, brings a smile to my face. And, I hope, to yours.
“The Affordable Care Act is working,” the President said. “And I’ll tell you, everywhere I go around the country, I’m meeting individuals who come up and thank me. How passionate they are about the difference its made in their lives, it really reminds me why we do all of this.”
When he’s not trying to find gainful employment for decapitators and immolators, Obama spares a few words for soaking the rich.
This guy never mentions Obama by name, but if the president were in his classroom, he’d be sitting in the corner wearing a dunce cap:
A few points to highlight:
Nearly everyone assumes that a person who is among the top ten percent of all income earners qualifies as rich.
But according to 2011 data, a top ten percent household makes around $150,000 or above in gross annual income — that’s income before deductions and taxes. Now, $150,000 is a nice living, but it certainly doesn’t make you rich.
OK, then. What about the top 5%?
You get into this percentile if your household makes around $190,000 or above. That’s a nice bump. But it hardly puts you in the rich category.
I don’t have to tell a lot of our urban readers that 150-190k hardly qualifies as rich in Boston, New York, San Francisco, etc. Professor Ohanian is right that the people we can all agree are rich are few and far between.
But thank God for them:
Now, let’s talk about fair.
Fair would seem be that the group of taxpayers who earn 10% of the country’s income would pay 10% of the country’s taxes; the group who earned 20% would pay 20% of the taxes and so on.
But what If I told you that, according to IRS data, the top 10% of all earners — the people making $150,000 and above — pay 71% of all federal income tax while earning only 43% of all income.
If anything, the top ten percent pay more than their fair share.
So, as it happens, do the much reviled top 1%. They earn 17 percent of all income, but pay 37% of all federal income taxes.
That’s an apples-to-apples comparison—income to income tax. You rarely hear those numbers in this discussion. Doubtless because they undermine Obama’s argument.
As does this:
Ah, but what about payroll taxes — the money we pay to fund Social Security and Medicare? That takes a bigger bite of the paycheck of lower earners than higher earners. Isn’t that unfair?
[T]he benefits we receive from Social Security are capped, no matter how much we have paid in. This means that the payroll taxes of high earners actually help subsidize the social security and Medicare benefits that low earners receive at retirement.
But there’s one group Professor Ohanian does finger for freeloading:
And what about those at the other end of the income scale, the lower earners? Are we squeezing them? Hardly. Those who make $45,000 or less, 47% of all earners, pay little and often no income taxes.
Deana Ard wants her tax refund as soon as possible. She says she files her return in mid-January every year and receives her refund within two weeks.
This year, Ard said her refund is taking longer — and she’s blaming Obamacare.
Ard, who went without health insurance last year, doesn’t mind having to pay a $160 Obamacare penalty as part of her 2014 tax return. But she says her $7,124 refund is on hold, and the IRS won’t tell her why.
Ard is not alone. Scores of readers have written CNNMoney that they too were subject to the Obamacare penalty and that their refunds are taking longer than usual. Ard has rallied more than 1,000 people to a Facebook page devoted to those in a similar situation.
IRS is denying this, natch.
Jessica Johnson is one of those caught in limbo with a TC 570 after paying a $281 penalty. The married mother of three, whose return was accepted on Jan. 20, is waiting for a $9,450 refund from the IRS to pay credit card bills and add to her savings. Last year, she said she got her refund in less than 10 days.
Johnson, who now has insurance under her husband’s plan, has called the IRS nine times.
“I’m frustrated,” said Johnson, who lives in Savannah, Ga. “I just want to know what’s going on. It’s ridiculous that I am being penalized again for being honest about not having healthcare.”
Here’s the best one:
For Daniel Flowers, an $8,153 refund means being able to keep the lights on and his car running. The Cincinnati, Ohio, resident was counting on having the funds in a week, which is how long it usually takes. He’s called the IRS, but they say they can’t tell him anything until after 21 days has passed.
Flowers, who works in a hotel and paid $190 for not having insurance, may not have that kind of time. He’s gotten his landlord and others to give him some extensions, but the lights will go off next week.
“I need this refund. I worked hard for this,” said Flowers, who takes care of his two young nieces. “I can’t access my own money.”
Yes, Daniel, that is what liberalism is all about. They want your money, they need your money, they take your money. What a nasty, vindictive crew this administration is.
Serial tax avoidance appears to be a hallmark of Al Sharpton’s operations. But there’s a warning here: Others have gone to prison for lesser amounts. The list includes rock legend Chuck Berry, Grammy winner Lauryn Hill, Ron Isley of the Isley Brothers, Survivor reality star Richard Hatch, hotel queen Leona Helmsely, and baseball’s Pete Rose.
According to a New York Times’ review of government records last fall, the MSNBC host and civil rights activist personally faces federal tax liens for more than $3 million in back taxes owed, and state tax liens of $777,657. So in total, Sharpton reportedly owes more than $3.7 million in back taxes. His other two for-profit businesses, Raw Talent and Revals Communications, (both now defunct) owe anywhere from $717,000 to more than $800,000, based on state and federal tax liens, reports from the Times and National Review indicate. Revals Communications also either didn’t file its tax returns, or underpaid its tax bills from 1999 to 2002.
Sharpton’s National Action Network also owed more than $813,000 in federal back taxes as of December of 2012, according to the nonprofit’s recent filings. At one point, the National Action Network’s tax liability more than doubled last decade, jumping from $900,000 in 2003 to almost $1.9 milion in 2006. In 1993, Sharpton also had entered a guilty plea for the misdemeanor of failing to file his New York State income-tax return. Sharpton has also said the National Action Network had once given him a loan to pay for his daughters’ tuition, which is a violation of the law.
You know what they say, Al. Orange is the new black.
Leona Helmsley was quoted as saying “only little people pay taxes”. Al Sharpton has shrunk in size in recent years, but the littler Al Sharpton still doesn’t pay taxes.
I know that liberals are dumb, so I’ll type slow. What this means is that instead of inheriting the family home on the “step up basis”, meaning no taxes on the appreciation over the decades, you now get to pay taxes on the full amount. Whether you have the money or not.
The Obama budget calls for a stealth increase in the death tax rate from 40% to nearly 60%. Here’s how it works:
Under current law, when you inherit an asset your basis in the asset is the higher of the fair market value at the time of death or the descendant’s original basis. Almost always, the fair market value is higher.
Under the Obama proposal, when you inherit an asset your basis will simply be the descendant’s original basis.
Example: Dad buys a house for $10,000. He dies and leaves it to you. The fair market value on the date of death is $100,000. You sell it for $120,000. Under current law, you have a capital gain of $20,000 (sales price of $120,000 less step up in basis of $100,000). Under the Obama plan, you have a capital gain of $110,000 (sales price of $120,000 less original basis of $10,000).
There are exemptions for most households, but this misses the larger point: the whole reason we have step up in basis is because we have a death tax. If you are going to hold an estate liable for tax, you can’t then hold the estate liable for tax again when the inheritor sells it. This adds yet another redundant layer of tax on savings and investment.It’s a huge tax hike on family farms and small businesses.
Uh, here’s the deal. Family farmers and small business owners don’t typically vote for the dems. They are not important to this administration. Why not just confiscate the farm once dad dies? Wouldn’t that be simpler? And force the kids to keep it running so we continue to have food? Doesn’t that seem like a good idea? Because how many family farms can pay the taxes, millions of dollars of taxes, when dad kicks? Or maybe we should just confiscate the farms, give them to big corporations.. no Wait.. give them to the government directly. Why should anyone hold private property? Dad didn’t build that farm, the government did.