The GOP Tax Bill Is Breathtakingly Generous to the Super Wealthy

Someday, kids, this will all be yours. And completely tax free! Who's your daddy now?

The Republican tax bill is a gift that keeps on giving. Literally. I keep finding new nuggets in it that—go figure!—weren’t in the brief talking points that Republicans handed out last week. But if you dig through the bill, there they are.

Here’s the latest: the Republican bill eliminates the estate tax. That’s not news. But it retains the step-up in capital gains. That is news. It hasn’t been a part of previous attempts to kill off the estate tax.

If you’re not following what this means, here’s an example. Suppose you’re uber-rich and you buy $1 billion in Apple Stock. By the time you die it’s worth $3 billion. Your heirs, lucky ducks that they are, don’t have to pay estate tax on that $3 billion. But they do have to pay normal capital gains on the $2 billion appreciation in the Apple stock. At 20 percent that comes to $400 million.

However, the Republican bill eliminates that too. Not only does it eliminate the estate tax completely, but it allows you to “step up” the value of the estate and avoid capital gains taxes entirely. In our example, you literally get $3 billion free and clear, and you owe taxes in the future only on the appreciation above $3 billion.

This is breathtaking. In the past, even hardcore Republicans have agreed that you need to have one or the other: either an estate tax or a normal capital gains tax on investments that you pass along to your heirs. No more. When the super-rich die, their capital gains liabilities are wiped out and their heirs pay no estate tax. This all but eliminates income tax of any kind on the mega-wealthy.

Ivanka and the grandkids must be licking their chops over this. It’s beyond outrageous. WILL ANYONE PAY ATTENTION IF I SAY IT IN ALL CAPS? No? I didn’t think so.