Last week, Democratic senator turned anti-tax lobbyist Heidi Heitkamp, who represented North Dakota for one term before losing in 2018, appeared on to make a surprisingly emotional appeal against President Biden’s plan to close a notorious loophole for the wealthy. The loophole, called “stepped-up basis” or “the angel-of-death loophole,” allows capital gains to escape any tax at all as long as the owners pass the asset on to their heirs before they sell it.
Heitkamp’s thoughts were with the victims of this reform. She did not invoke the tax implications for the handful of extremely wealthy families that have been financing a lobbying effort to preserve their tax advantages, including the group that currently employs her as its public face. Instead, she cited the burden of an imaginary working-class man named “Sam.”
The scenario that troubled Heitkamp was that Sam, or people like him, would inherit a family-owned cabin that had become extremely valuable and now have to pay tax on the estate. “The truck driver — let’s say truck-driver Sam, who let’s say makes $100,000 a year — all of a sudden now has a tax that he owes on inheriting that property,” she complained.
In fact, the original Democratic proposal allowed for a $1 million exemption per spouse, and it allowed heirs a 15-year period to spread out the payments. So poor Sam would only have to pay tax on whatever value his cabin had over $2 million, which seems like a rather lavish spread for a working-class fellow, and he would have enjoyed a comfortable period over which to make those payments.
Even so, the pleas made by Heitkamp and other moderate Democrats on behalf of the rural petite-bourgeoisie heirs to landowning fortunes exceeding $2 million were felt. Democrats in Congress proposed to raise the exemption to $5 million per spouse. Surely, now that truck drivers inheriting cabins worth less than $10 million would be spared, Heitkamp would have softened her opposition.............
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