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**MAY 21, 2021**

Kuttner on TAP

Richie Neal Strikes Again-at Biden's Tax Reform Plans

****

President Biden plans an expansive tax package that includes both higher
rates on the rich and much more muscular tax enforcement. His plan would
double the IRS enforcement staff, targeting wealthy tax evaders. That
would bring in an estimated $700 billion

over a decade.

But the plan also calls for other reforms. One central measure, long
sought by progressives, is to close the loophole in the estate tax known
as the "step-up in basis." Under present law, if the heirs of an
investor inherit stock that has appreciated in value over decades, the
capital gains tax that would otherwise be owed is washed away
.

Biden proposes to close that loophole, both as elementary fairness and
as a revenue raiser. The Urban-Brookings Tax Policy Center estimates the
likely revenue as $370 billion

over ten years.

But according to Bloomberg, Rep. Richie Neal, the powerful chair of the
House Ways and Means Committee, has floated the idea through his senior
staff of allowing heirs to pay no capital gains tax

as long as they don't sell the stock.

Those heirs could then pass the stock down to

**their** heirs, and the capital gains tax would never be paid. Since
stock ownership is so highly concentrated, this is primarily a benefit
for the rich.

Neal in a statement tried to walk back his staff comments, made in a
call with tax experts and progressive groups, as just one option among
many. "I've been very clear that no decisions have been made on this
subject," he said in a statement.

Though Joe Manchin has also suggested weakening some aspects of
Biden's tax reform efforts, my sources say the administration is more
worried about Neal. As well they should be.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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