That sounds fair and reasonable when you're talking about stocks, but if you talk about a small family farm who's owners typically have very little capital other than the land, are you proposing that they sell the farm in order to keep it?

Exempt the farm from taxes if you like farms. Whatever. That’s a public policy choice.

But don’t say we’re talking about a fucking farm when you’re advocating for no taxes on a diverse network of private equity positions and real estate holdings.

Don't assume you can read "fucking" more into what I wrote than what I wrote and cast your anger on me.

It's all public policy choice, and if you think that it's simple, than lay it all out for us after you've considered all the consequences (immediate, secondary, "unintended", and unintended) and get back to us.

I'm merely correcting an objectively incorrect claim: "The person who’s passsing the money down already paid tax on the money, whether income tax or capital gains tax."

I'm not advocating for increasing the estate tax (nor even necessarily closing the capital gains stepped-up-basis upon death). I am advocating for having our facts straight.

A $12 million family farm may be stretching the definition of 'small'.

Like it would be pretty amazing if that value was just due to land appreciation and had nothing to do with their management and investment decisions.

like, maybe? What are the demographics?

The one I know intimately is worth less than $1m for the land. I believe there are far fewer of those left than in 1960, but my perception is there are still quite a few.

All of the "small family farms" I'm aware of personally here in farm country are incorporated.

I think you need a better straw man.

Not the one I know.

Forgive my ignorance, but I see 2 possible scenarios for the assets to be passed on to the heirs:

- simply transfer possession - in this case, there is no realised gains, so no need to charge taxes. they can be charged when the gains are eventually realised.

- realise the gains and transfer the money - in this case, tax is charged on the realisation of the gains.

What have I missed?

I don’t know anything about taxes and stuff but in > simply transfer possession - in this case, there is no realised gains,

aren’t the inheritors gaining wealth they did not have before?

> aren’t the inheritors gaining wealth they did not have before?

In terms of stocks and land, yes and no. They are receiving assets they did not have before, and those assets have a market value that is not realized until they sell them. They are receiving paper wealth, and while paper wealth can be beneficial (you can borrow against it), it is not the same as actual spendable cash. A government could tax them on the value of those assets at the time of transfer, but that may require the inheritor to dispose of some or all of the assets in order to pay the tax bill. Governments typically require their citizens to pay taxes in currency, not assets.

Note that governments do sometimes treat asset transfers this way (e.g. restricted stock awards), but they typically view unrealized gains as something to be taxed when they are realized (ie. converted to currency).

What's really beneficial with inheritance is the step-up basis. When assets get inherited, the cost basis is reset to the market value at the time of the transfer, which means taxes are never paid on any gains made between acquiring the asset and the death of the owner. So even if the inheritor sells them at a later date, they still pay substantially less in taxes than they would normally pay.

Indeed. They are perpetuiting inequality...