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Former Sen. Heidi Heitkamp now lobbies for tax loophole she called “one of the biggest scams”

1 52 31
02.09.2021

Former Sen. Heidi Heitkamp, a moderate North Dakota Democrat who was defeated in 2018 and has become a frequent cable-news commentator, is now leading a dark money group's effort to preserve a tax loophole that overwhelmingly benefits the wealthy. Just a few months earlier, Heitkamp had described the loophole as a "scam."

Heitkamp, who was passed over for a job in President Biden's Cabinet, now chairs a nonprofit called Save America's Family Enterprises (SAFE), a dark money group that does not disclose its donors but has launched a six-figure ad campaign to lobby against a key provision in the Democrats' $3.5 trillion budget proposal. The group aims to preserve the "stepped-up basis" loophole, which allows people to avoid capital gains taxes on inherited investments. Biden has called for closing the loophole to help pay for the spending plan, but Heitkamp has gone on a media blitz in the past week to "sound the alarm" over the proposal as big-money groups seek to water down key tax provisions in the budget framework.

It's a strange turn for a former lawmaker who voted against the 2017 Trump tax cuts for the wealthy and just five months ago decried the loophole when former New Jersey Gov. Chris Christie complained that capital gains taxes — which are paid on the profits of an investment when it is sold — amount to "double taxation" during an appearance on ABC News' "This Week."

"This is one of the biggest scams in the history of forever on income redistribution," Heitkamp told Christie in April. "If you have a tax — if you have a stock, you can pass it on to your kids with stepped-up basis, and it's never taxed. You know that there needs to be reform on unearned income. And so to demonize it and say it's going to hurt the little guy, yes, that just is not factual, Chris. And you know it."

The loophole overwhelmingly favors ultra-wealthy families and costs the United States more than $40 billion per year. Under existing law, if someone sells a stock or an asset they must pay capital gains taxes on "realized" assets, but if they instead leave stocks or assets behind to their heirs, under the "stepped-up basis" rule, the........

© Salon


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