Taxes

One of the crowing achievements that parents have in passing the torch is when children inherit the old home. Mom and Dad purchased their home 40 years ago for $50,000. They paid the monthly cost for 30 years and then had a mortgage burning party. That may be about to change. The kids got the home tax free because of something called stepped up basis at death. Simply put this meant that if you inherit property the value is stepped up to the present appraised value and there is no tax. Under the proposed changes in the Biden administration they will do away with the step up. This means if the kids sell the house for $300,000 they will pay 20% capital gains tax on $250,000 or 50 grand. This will hurt the middle income group more than any other. Also when the corporate tax was lowered many utility companies passed some of the savings on to their customers and that will likely be reversed and that hurts middle incomers. In addition there is talk of increasing the gasoline tax which once again hurts middle income people. Meanwhile if the restrictions on fracking continue this will raise the price of all oil and natural gas products, things like utilities and gasoline. Single and married adults will lose about $2,000 in tax savings they got from the Trump tax cuts. These death by a thousand cuts will not receive much attention in the press but they will be felt if enacted.