Vice President Kamala Harris is on record in support of a Death Tax hike, including plans to impose a second Death Tax by taking away stepped-up basis when parents die.
Harris’ plans to increase the Death Tax are yet another example of the candidate’s willingness to punish hardworking Americans for their success, this time punitively hitting families experiencing the death of a loved one.
Under current law, the cost basis of assets passing directly to heirs receives a “step-up” to its fair market value. Without stepped-up basis, family-owned businesses would be stranded with a massive tax on unrealized gains after the passing of the owner.
Harris has not been shy in taking ownership of Biden-Harris FY 2025 budget, noting in a March post on X that the budget plan was jointly put forward by her and President Joe Biden.
Harris’ proposal to take away stepped-up basis has already been tried, and it failed: In 1976 Congress eliminated stepped-up basis but it was so complicated and unworkable it was repealed before it took effect.
As noted in a July 3, 1979 New York Times article, "the new law touched off a flood of complaints as unfair and impossibly unworkable. So many, in fact, that last year Congress retroactively delayed the law’s effective date until 1980 while it struggled again with the issue.”
Harris has also proposed a separate plan to increase the rate of the existing federal Death Tax and increase the number of taxpayers subject to the tax. Harris personally authored a post on Medium during her 2020 presidential bid as part of her “Medicare for All” plan. That plan calls for a whopping 65% top rate for the Death Tax, up from the current top rate of 40%. The same plan dramatically lowers the current Death Tax exemption level, applying a 45% tax on estates valued over $3.5 million, a massive reduction from the current exemption level of $13.6 million. This means the number of families subject to the death tax would greatly increase.
Harris’ willingness to raise taxes on families and family-owned businesses experiencing the death of a loved one demonstrates her far-Left political tendencies. Harris in her own words even credits self-described socialist Sen. Bernie Sanders (I-V.t.) as the inspiration for her Death Tax plan.
Harris can also increase the burden of the Death Tax by allowing the 2017 Trump tax cuts to expire, something she has repeatedly threatened to do. Republicans’ 2017 Tax Cuts and Jobs Act (TCJA) provided Death Tax relief for many Americans by doubling the estate tax exemption, greatly reducing the number of taxpayers forced to pay the death tax and allowing more family-owned businesses, farms, and ranches to pass on from one generation to the next.
Harris has pledged to discard this Death Tax relief along with the entirety of the 2017 tax cuts if she became president, proclaiming, “On day one, we’re going to repeal that tax bill.”
If Harris takes office, her pledge to repeal TCJA will revert the estate tax exemptions to their pre-TCJA levels. This means that the exemption will halve, and many more Americans will be hit with death taxes.
The Death Tax places an undue burden on the taxpayer and their future generations.
In contrast to Harris, Republicans are focused on providing further relief from the Death Tax for American families and small businesses. President Trump has vowed to make the provisions of his 2017 tax cuts permanent while House Republicans, led by Rep. Randy Feenstra (R-Iowa), have introduced the Death Tax Repeal Act to fully and permanently repeal the Death Tax. That legislation has 170 cosponsors in the House, including two Democrats.
The strong show of support from House Republicans to repeal the Death Tax entirely shows where momentum is on the issue for conservatives. For conservatives, the death tax is a moral issue and correctly recognized as a form of double taxation. A taxpayer will work their entire life while being subjected to income, payroll, and numerous other forms of taxes. They have already paid taxes on their life’s work while they were alive, and they should not have to pay further taxes from beyond the grave.
Americans for Tax Reform President Grover Norquist said, “It is a sign of the health of American society — and the weakness of envy as a political program – that a majority of Americans have supported abolishing the Death Tax over the decades…the U.S. abolished the Death Tax in 1802, 1870, and 1902.”
Harris’ plans for hiking the Death Tax that would punish hardworking family-owned businesses seeking to pass their business on to the next generation. This fundamentally contradicts the basic American principle that you have a right to pass on the hard work and success of your life to your family.
Instead, Harris sees this as an opportunity for the government to take a bigger bite from taxpayers.
Meagan Dean is a federal policy associate at Americans for Tax Reform.