One of the ways the Biden Administration plans to help pay for its very expensive Green New Deal is to levy higher taxes on assets that parents pass down to their children. Under current law, certain inherited assets like farms, real estate, and investments can be left to heirs without being taxed. This enables family businesses to be retained in the family from one generation to the next.
Under the proposed new tax, the son or daughter inheriting the family farm or store would face an immediate bill for the appreciation in value the business has garnered over the lifetime of the bequeathing parent. The amount due would most likely exceed the revenue available from the business. This would necessitate either a sale of the business or a massive infusion of newly borrowed money to pay the tax.
Secretary of the Treasury Janet Yellen called the planned tax change “a matter of equity. Why should a person who has run a successful business be allowed to pass it on to his children? By taxing away this gain in value we can push these properties into stronger hands. During the pandemic family businesses fared poorly. Many had to be closed down to prevent the spread of COVID. Fortunately, the big corporations were able to take up the slack.”
Yellen then pivoted to a recent study done by professors at Brown University that discovered there has been a 21% decline in IQ for children born during the pandemic, saying that “the fact is, the next generation may simply lack the intelligence to manage family businesses. I think this makes the case for greater consolidation of assets into mega-corporations, publicly owned industries, and collective farms. This would streamline the economy, eliminate unnecessary redundancies, and give government experts more control over what is produced, who produces it, and how the wealth of the nation is distributed.”