Life may be about to get easier for people with rich parents. They can thank the Republicans’ tax plans.
Part of their prep school tuition could be shielded from taxes. A larger chunk of their inheritances would be free of estate tax. Family-owned businesses they have a stake in could be taxed at a discount. Stock portfolios gifted to them by their parents may keep climbing because of lower corporate tax rates. And their parents could enjoy a bigger child tax credit than poor working families would.
“It’s a pretty clear case to make that this helps wealthy children because they’re the children of shareholders,” said Kimberly Clausing, an economics professor at Reed College in Oregon who has worked on research with the left-leaning Washington Center on Equitable Growth.
Government and outside analyses of the House and Senate tax bills show that the benefits would flow disproportionately to the wealthy. Aides to President Donald Trump argue lower tax rates for companies and the wealthy would trickle into substantial pay raises for middle-income workers. In fact, Trump told middle class families at the White House on Tuesday that the tax cuts would leave them flush with cash.
President Donald Trump with Secretary of Defense Jim Mattis, center and Secretary of Commerce Wilbur Ross, right, speaks during a cabinet meeting in the Cabinet Meeting Room of the White House in Washington, Wednesday, Dec. 6, 2017. (AP Photo/Manuel Balce Ceneta)“You’re going to be making so much money [you’re] not going to know what to do with it, perhaps, I hope,” the president said.