There is no escaping death and taxes – and according to President Biden’s tax plan, the so-called “death tax” will be a lot of fun for New Yorkers.
The proposed White House tax law will treat inheritance tax as a capital gains event for the first time, meaning all heirs to an estate could pay the 39.6 percent capital gains rate on inheritance. That’s in addition to state net wealth tax, New York state and city taxes, New York inheritance tax, and state inheritance tax.
The overwhelming sum? A rate of 78.9 percent on the wealthiest New Yorkers who inherit assets – a steep increase from the current rate of 49.6 percent.
A Biden spokesperson confirmed that the richest people in the blue states could face sky-high inheritance taxes, but noted: “The reform is designed with safeguards so that family businesses and farms don’t have to pay taxes when passed on to heirs, who go on to run the business. “
Still, while aimed at the rich, the rule could apply to anyone who inherits more than a million dollars. And maybe it’s those at the bottom of the bracket who pay the price. In fact, some tax experts warn that the move may not have its intended effects, and whether New York will actually generate more revenue remains to be seen, they say.
“There aren’t many people who pay inheritance tax, but they’re mobile,” says Jared Walczak, vice president of government projects at the tax foundation. “This creates a strong incentive for people to retire.”
Given that New Yorkers could save up to 14 percent by moving to a state like Florida – a part that could mean thousands or millions of dollars for beneficiaries – many will have a hard time heading south in their sunset years walk.
“No New York taxpayer will pay 79 percent,” Frank Agostino, founder and president of Agostino & Associates in Hackensack, New Jersey, told the Post. “Real income redistribution will go from the rich to the tax attorneys and lobbyists who help ‘rich taxpayers’ pay what the rich taxpayers believe to be their fair share.”
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