The federal deficit cannot be sustained. Any remedy will involve sacrifice.

Like most Americans, I am willing to sacrifice and pay higher taxes, provided it’s fair. One specific tax loophole — the step-up in basis — is glaringly unfair.

Put simply, investment owners get to “step up” and eliminate capital gains taxes on assets they hold until death. This tax loophole gives people a reason to keep assets, including homes, until they die to avoid taxes. It “locks up” those assets reducing market supply, including houses, for sale. That contributes to the housing shortage. 

Because this allows the capital class to avoid significant taxes, it creates a system that favors wealth over work. It’s clever, but not cohesive. 

Closing this loophole will have little effect on the national deficit. However, it’s a step a toward fairness and the feeling that we are all in the same boat. We will need that feeling.

Ted Samuel
Freeport