Knowledge Tree
Relations (1)
related 2.58 — strongly supporting 5 facts
The 'step-up in basis' provision directly impacts the calculation of 'capital gains' by adjusting an asset's cost basis upon inheritance [1], and both are frequently analyzed together in tax policy discussions regarding federal revenue and tax expenditures [2], [3], [4].
Facts (5)
Sources
How the Government Subsidizes Wealth Inequality americanprogress.org 5 facts
claimThe 'step-up in basis' provision in the U.S. tax code is a subsidy for inherited wealth because it allows the basis of an asset to be adjusted to its current value upon inheritance, rather than the original purchase price, when calculating capital gains upon sale.
claimRepealing step-up in basis and low tax rates for capital gains and dividends would keep the national debt on a downward path as a share of GDP through the end of the five-year budget window analyzed by the Congressional Budget Office.
claimWealthy individuals can combine the step-up in basis rule with like-kind exchange rules to avoid incurring taxable capital gains.
measurementThe Congressional Budget Office (CBO) estimated that the total 10-year cost for major tax expenditures, including step-up in basis and reduced rates on capital gains and dividends, was $1.984 trillion from 2014 to 2023.
claimIf the federal government eliminated step-up in basis and reduced tax rates on capital gains and dividends, federal revenues would be sufficient to cover all federal programs over the 2014-2023 period, resulting in a primary budget surplus.