PIA Opposes Biden Proposal to Raise Taxes On Business Assets
The Biden Administration is proposing the imposition of tax increases on businesses to pay for its proposed transportation and infrastructure plan. As part of this effort, the administration wants to repeal of the practice of stepping-up the basis for capital gains tax of assets transferred at death. This change would end the use of stepped-up basis and begin the taxation of those built-up gains at death as though the assets had been sold.
Current tax law allows heirs to accept an asset on the death of a family member without sustaining a penalty for doing so. Repealing the use of stepped-up basis by imposing capital gains taxes on asset transfer at death would force many family-owned businesses to liquidate assets or lay off employees to cover their tax burden. This new tax would be imposed on top of any existing estate tax liability, exacerbating the financial effect of the death and effectively creating an additional tax at death. The plan calls for an end to the effects of a stepped-up basis for gains of $1 million or more ($2 million or more for a married couple).
PIA opposes this effort to raise taxes on family-owned businesses and supports the continuation of the use of stepped-up basis. PIA has joined over 100 business groups from a variety of sectors to urge the Republican and Democratic tax-writing committee leaders to protect family-owned businesses from exorbitant tax increases by defending stepped-up basis and opposing changes to current law.