A separate person briefed on the Tuesday call said that Neal’s staff wasn’t floating a definitive idea, but discussing the range of options for Democrats.
One Democratic lawmaker, New Jersey Representative Bill Pascrell, a senior Ways and Means member, has introduced legislation that would end step-up in basis and make the tax bill due at the time of death of the benefactor.
“By allowing the richest people in American to avoid paying taxes on their capital gains, stepped-up basis is a seminal driver of the economic inequality that is slowly poisoning the United States,” Pascrell said in a statement. “I am always open to discussing avenues to strengthen legislation that addresses tax inequities. But our focus remains on sealing shut this loophole.”
‘No Decisions’
Neal said in his statement, “I’ve been very clear that no decisions have been made on this subject, though I know Congressman Pascrell has put forward legislation on the matter.”
These early discussions indicate the challenges the Biden administration will face as it seeks to raise roughly $4 trillion to pay for both its infrastructure and families plan. It also shows the extent to which centrist Democrats on Capitol Hill may be reluctant to embrace the magnitude of tax increases on the rich and on corporations proposed -- even as Biden’s top aides tout polling that shows the majority of Americans approve of higher taxes on both.
The idea suggested by Ways and Means staff would address criticisms of Biden’s estate-tax proposal that it could force people who receive illiquid assets -- such as real estate or businesses -- to sell their inheritances right away because they didn’t have the cash on hand to pay the tax.
Biden’s plan does have an exception for family-owned farms and businesses, but the administration hasn’t spelled out the specifics about who would qualify.
Representative Mike Thompson, a California Democrat who chairs the Ways and Means panel that oversees tax issues, said at a hearing earlier this month that family farms and business shouldn’t be forced to sell, because they cannot pay the taxes.
Progressives who have been proposing to tax assets at death for years, and are likely to oppose changes that would greatly weaken Biden’s proposal.
This article was provided by Bloomberg News.