The House Democrats’ plan eliminates the repeal of a tax provision for inheritances

House Democrats on Monday unveiled a package of tax hikes on businesses and the wealthy without the proposed tax bill proposed by President Joseph Biden on hereditary assets at death, according to a summary of the Ways and Means Committee.

Currently, heirs can defer taxes on inherited profits until they sell the property. They also receive a tax provision, the so-called step-up base, which adjusts the purchase price of the asset to the value of the date of death, saving taxpayers $ 41 billion a year, according to an estimate by the Joint Tax Committee.

Biden has called for inheritances to be treated as a sale, forcing heirs to pay death taxes, with a profit exemption of more than $ 1 million for singles and $ 2.5 million for married couples.

The measure along with capital gains tax increases could generate $ 213 billion over ten years, according to Tax Foundation estimates.

However, House Ways and Means Democrats withdrew Biden’s proposal from his tax plan, shifting to other taxes to fund his $ 3.5 trillion spending plan.

One plan is to reverse the $ 5 million property and donation tax exemption, according to a summary of the proposals, by exposing properties and gifts above that amount to a federal property tax. 40%.

Former President Donald Trump increased property and gift tax exemptions to $ 11.7 million for individuals and $ 23.4 million for married couples through the 2017 Republican tax review.

However, these provisions will expire after 2025, lowering the thresholds to about $ 6 million and $ 12 million, respectively.

“The lack of changes to move forward in Ways and Means texts suggests that there are ongoing concerns about how this proposal would affect family-owned businesses and farms,” said Garrett Watson, a tax analyst at the Tax Foundation.

While Biden has promised protection on family-owned farms, there have been setbacks by industry groups, such as the American Farm Bureau Federation, and lawmakers on both sides of the aisle.

“In recorded history, we haven’t even seen a family that has lost their farm due to a property tax,” said Steven Rosenthal, senior member of the Urban-Brookings Fiscal Policy Center. “It just doesn’t happen.”

“But that doesn’t hurt the imagination of all these politicians who want to use the family farm as a straw man,” he said.

These proposals may change as Democrats on the Forms and Means Committee continue to debate fiscal policy. While the House may pass the final bill in the coming weeks, the party will also need the support of all members of the Democratic Senate group.