MCViewPoint

Opinion from a Libertarian ViewPoint

EconomicPolicyJournal.com: Another Tax Break That Biden Wants to End

Posted by M. C. on April 30, 2021

Closing that tax loophole, which has existed since 1921, is part of his $1.9 trillion spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds in other properties within six months of the sale.

https://www.economicpolicyjournal.com/2021/04/another-tax-break-that-biden-wants-to.html

“The income-tax exemptions in our income tax system are not loopholes. The gentleman who complained about loopholes in our income tax . . . implicitly starts from the assumption that all income over fifteen or twenty thousand dollars ought to be confiscated and calls therefore a loophole the fact that his ideal is not yet attained. Let us be grateful for the fact that there are still such things as those the honorable gentleman calls loopholes. Thanks to these loopholes this country is still a free country . . . .” –Ludwig von Mises

President Biden is an aggressive big tax, big government, man. 

The man is thinking about destroying capital wealth accumulation in a multitude of ways. 

He is really a socialist thinking “hate the rich” man who has no understanding of the important role that capital plays in boosting the standard of living for all of us.

His new economic plan would eliminate a tax break for many real-estate owners that has enabled them to defer paying capital gains on property sales, reports The Wall Street Journal.

Closing that tax loophole, which has existed since 1921, is part of his $1.9 trillion spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds in other properties within six months of the sale.

The deals are known as 1031 exchanges, named for the section in the U.S. tax code. The Biden proposal would abolish 1031 exchanges on real-estate profits of more than $500,000.

In theory, capital-gains tax from these deals eventually gets paid. But on the advice of estate planners, many real-estate investors continue to buy and sell properties this way until they die, passing the capital gains on to their heirs tax-free at death. Biden seeks to close the death loophole, too, by taxing capital gains on inherited assets, according to the Journal.  –RW

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