Graphic: Inside the ‘trust fund loophole’

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Inside the $40-billion-a-year tax 'loophole' President Biden's plan would eliminate.

The federal tax code contains a loophole so big that in the time you spend reading this article, it will have saved wealthy families and their heirs an average of about $400,000. Over the course of a day, the average total savings is more than $100 million.

Biden, who advocated removing the provision while on the campaign trail, continued attacking it this month in an address he made in support of his plan. However, the U.S. Senate publishes a yearly report that includes an estimate of the impact of the stepped-up basis on Americans, and according to that report the top earners benefit the most from this part of the tax code.a report from the Family Business Estate Tax CoalitionEstates of more than $11.7 million do not benefit from the stepped-up basis and are subject to the estate tax, which taxes about 40 percent of an estate’s worth. The tax used to start at $5.

“Middle-income people spend most of their assets before they die, whereas high-income people have more wealth than they can spend,” said Leonard Burman, a co-founder of the Urban-Brookings Tax Policy Center, who contributed data to the Senate’s predictions. “So the more unequal wealth becomes, the more assets you’ll find are being passed tax-free.”

Schoenberg said he favors throwing out the stepped-up basis rule, and supports taxing assets in full at inheritance. He concedes that getting there is a lot harder than it sounds.

 

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Biden is hitting all the little people with his new 1099k next year you make 600 bucks doing anything you get a 1099K , even mom and pop selling there worldly possessions get screwed with a 1099 selling there stuff so why not others

Full stop.

biden is a stooge no matter how many times media try to give him Legitimacy, JennaEllisEsq GOPLeader GOP atensnut PlaysTrumpCard tedcruz seanhannity

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You asked for this president. It’s an American call. Now, deal with it.

now we'll hear some scare tactics from the ones affected. and will drag the middle class to fear it too.

You fools this applies to everyone that is expecting your parents to leaving you an inheritance from their left over investments in 401k’s, stocks, mutual funds, savings bonds, municipal bonds, and cash funds! Closing this loophole is double and triple taxation!

Stay out of our wallet! Taxation is theft!

Trust fund children are leach on our economy! They rarely work, pay taxes, or provide society with anything positive. Take half!!!

This is why the rich need to put their money in digital currency the US can't track.

He has no plans and NBC has no network!!

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Why do Repugnants want corporations to pay no taxes? Simple answer- because they donate to the Repugnant party

So this is something you have known about for your 50+ years as a career politician. And yet.... this is the first time you have said anything about it. I guess you were saving it for a photo op moment? You are a heck of a guy, Joe.

This has always been tried as a way to get rid of the independent family farms in America by corporations.

This is very unfair for the rich because now they have to re-negotiate the price on their new 150 million yacht! So unfair!

$40 billion loophole nothing compared to multi trillion dollar gov funding, political motive suspected.

Doesn't this tax loophole just incentivize the wealthy to not work?

Rich people must pay their fair share of taxes.

It’s time these entitled trust fund babies start paying up.

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