Exploring Poverty, Wealth Inequality, Earned Nature Of Public Welfare Benefits: Inequality.org
What Decades of Social Work Taught Me About Poverty
Editor’s note: Readers can learn how American politics got to this point in the documentary Wealth of the Wicked. We also interviewed Professor Edelman about the underlying causes of persistent poverty, where being poor is criminalized. The following information about the OBBBA is provided by an estate and tax planning specialist serving wealthy investors and those planning to pass their substantial estate to their heirs. It should be noted that these deductions also apply to those who have more modest savings and real estate holdings, with respect to building generational wealth, but it is necessary to have an expert of some sort to advise on these complicated legal matters:
“A number of provisions in the OBBBA are extensions of temporary provisions introduced in the Tax Cuts and Jobs Act (TCJA) signed into law in 2017, many of which were set to expire on December 31, 2025. These extensions generally lowered taxes for high-net-worth individuals and, because they have been made permanent, there is less uncertainty around how to plan for certain key tax provisions.
Lower federal marginal income tax rates: The OBBBA made permanent federal marginal income tax rates that had been reduced by the TCJA. From a tax planning standpoint, this development is a welcome one, as rates were scheduled to increase to their higher, pre-TCJA levels after 2025. The TCJA reduced federal marginal income tax rates for tax years 2018 to 2025 and changed many income brackets to encompass different ranges of taxable income. This change likely benefited high earners by lowering their federal income tax liability, with the top marginal rate dropping from 39.6% to 37%.
Higher federal estate and gift tax exemption: When the OBBBA was signed into law, it increased the federal estate and gift tax exemption to $15 million for estates and gifts made after December 31, 2025. For married couples, this figure is effectively doubled to $30 million as each spouse may capture the full use of their individual exemption. Put simply, the full fair market value of your estate, plus any taxable gifts1 you made during your lifetime, can transfer free of federal estate and gift taxes up to the federal estate and gift tax exemption.
Remember, in 2018, the TCJA temporarily raised the federal estate and gift tax exemption from $5.49 million to $11.18 million, with the 2025 exemption amount of $13.99 million scheduled to revert to $5 million and then be adjusted for inflation in 2026. The permanent increase set by the OBBBA allows high-net-worth individuals to transfer more wealth to family members by lowering their federal gift and estate tax liability. And with the potential sunset to this provision no longer looming, the permanence of the exemption levels may provide greater clarity for long-term estate planning.
Increased standard deduction: The OBBBA made the increased standard deduction permanent at its post-TCJA level and slightly increased the standard deduction for tax year 2025. The 2025 standard deduction is $15,750 for single filers or married filing separately, $23,625 for head of household, and $31,500 for those married filing jointly.”
The following article was originally found here.
Not one person I’ve ever met wants to be poor, sick, disabled, struggling, or on the receiving end of public assistance programs.
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