Congresswoman Mimi Walters (R-Irvine) helped provide the wealthiest elite with a $4.4 million loophole, more evidence of a Republican tax bill “heavily tilted toward the wealthy,” according to a new study.
The Center on Budget and Policy Priorities (CBPP) released a report showing changes to the estate tax in the unpopular GOP tax bill only “exacerbates wealth inequality” in the United States.
The 2017 tax law doubles the estate tax exemption — the value of estates that is exempt from the estate tax — from $11 million to $22 million per couple. The few estates large enough to remain taxable — fewer than 1 in 1,000 estates nationwide — will receive a tax cut of $4.4 million per couple.
Walters joined most other California Republicans in supporting the Republican tax bill when it came to a vote in December 2017. At the time, Walters boasted that the bill would “provide benefits to individuals at all income levels.” Changes to the estate tax are just one more example of how the bill favors the rich and powerful over average workers.
While the richest 0.1 percent of Americans will see an average break of $193,000, the poorest 20 percent will see a mere $60. In other words, the wealthiest will receive in 3 minutes what the poorest Americans will receive in an entire year.
But in California, some people will see a tax hike. The median homeowner in California faces $3,200 in higher taxes because of provisions supported by Walters. In Orange County, it may be even worse, as some homeowners will be on the hook for a $4,500 tax hike.
Overall, about a million Californians will be on the hook for $12 billion in additional taxes next year, according to an analysis by the Franchise Tax Board.
CBPP notes that the bill not only prioritizes heirs and heiresses of massive fortunes, but it does so at the expense of important national priorities. The money going to the children of billionaires is money that is not going to critical needs.
“These large revenue losses are irresponsible given the fiscal challenges the nation will face over the next several decades,” CBPP notes, “such as the aging of the population, health care costs likely continuing to rise faster than the economy, interest rates returning to more normal levels, potential national security threats, and challenges such as large infrastructure needs that cannot be deferred indefinitely.”
“Large inheritances play a significant role in the concentration of wealth,” says CBPP. And this tax bill is tailor-made to help those at the very top, while mostly leaving the rest of Americans behind.