As GOP Lawmakers Eye Cutting Estate Tax, Will They Increase Income Inequality?

    Republicans in Congress are on the verge of fulfilling their long-time dream of eliminating the federal estate tax, and they could do it in a way that is even more generous to heirs than previous repeal efforts. Bills passed by the Senate and the House recently would reduce or scrap the taxes heirs now pay on estates larger than $5.5 million. And the bills would do so without repealing the so-called "stepped-up basis" provision. Ordinarily, people have to pay taxes when they sell off assets that have appreciated in value, like shares of stock or real estate. But heirs are exempted from that tax. That's because they already pay the estate tax. The bills approved by Congress recently would eliminate or reduce the estate tax, while leaving the exemption in place. In other words, you would be able to pass on assets that have gained a lot in value — like those Apple shares you bought years ago — and, unlike everyone else, your heirs never have to pay tax on the appreciation. To put itOriginal Article