Oh, I think we all know they “realize” it.
Lawmakers who sped a bill through the U.S. House last week may have handed a few more goodies to Wall Street’s wealthiest than they realize.
Investors in billion-dollar hedge funds might be able to take advantage of a new, lower tax rate touted as a break for small businesses. Private equity fund managers might be able to sidestep a new tax on their earnings. And a combination of proposed changes might allow the children and grandchildren of the very wealthy to avoid income taxes in perpetuity.
You can’t possibly think those were unintended effects. The entire point of the tax bill was to be a gift—or rather, a repayment—to the wealthiest of Republican donors. And the wealthiest of Republican donors want to stop paying taxes, thank you very damn much. On, if at all possible, everything.
The House bill would limit the tax to even fewer estates right away, and then eliminate it entirely in 2025. But it leaves in place a related measure that allows heirs to sell assets without having to pay income tax on the appreciation that took place before they inherited them.
Taken together, that means that a family whose fortune derives from a long-held asset—think Warren Buffett’s Berkshire Hathaway Inc., or the Walton family’s Walmart Stores Inc.—might never have to pay tax on the bulk of that wealth at all. The founding generation could borrow against the stock to meet expenses, and the next generation could sell it income tax-free.
Yeah, no kidding. So is this an accidental oopsie of Republican tax planning, or the intended effect? Let’s let GOP Rep. Chris Collins of New York answer that.
“My donors are basically saying, ‘Get it done or don’t ever call me again.'”
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