Biden’s New Death Tax Hits the Middle Class While Excluding Certain Wealthy Investors

The American Families Plan hits individuals with identical net worths very differently.

by Hank Adler

President Joe Biden’s American Families Plan (AFP) would impose a capital gains tax at death while essentially doubling the capital gains tax rate. With a major exception for large investors, it would make these changes without grandfathering existing unrealized capital gains.

This death tax would likely hit single taxpayers who own their homes more than married couples, because the appreciation of a home is not impacted by the owner’s marital status. A single person with a reasonable mortgage and some modest other capital gains assets at death could have her residence’s value eaten away by the new tax plus the mortgage.

Consider a single woman who has owned a New York apartment, her only asset, for 40 years. Jane has never made anywhere near $400,000 a year, so Biden has promised to not raise her taxes.

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