Imagine you won $15 million in the lottery. Before you took home your prize, the IRS would require that 24% be withheld for federal taxes — and you’d probably still owe the following April.
Now suppose you inherited $15 million from your parents. Under the Republican megabill, you will owe nothing.
There are a number of troubling provisions in this “big beautiful bill” which passed the House Thursday and is now headed to the White House for President Donald Trump’s signature, ranging from kicking millions of Americans off Medicaid to making student loans more expensive. But the estate tax exemption has largely escaped scrutiny.
There are a couple reasons for this. Thanks to a decades-long effort by Republicans, the exemption for the estate tax in the U.S. is already dramatically higher than the rest of the world. The bill will make permanent an exemption for up to $15 million in estate taxes from Trump’s 2017 tax cut bill that was set to expire at the end of the year.
The newer provisions of the bill have naturally attracted more attention. But make no mistake, the way this bill will cement the status quo on this issue is just as unacceptable.
The estate and gift tax exemptions in the bill not only add another $212 billion to its cost, they also contribute to growing inequality — and there’s no real justification for them. Tax cuts on the wealthy are usually justified by arguing that the money will trickle down — despite decades of evidence to the contrary — or by claiming it’s unfair to take away money that the wealthy have already earned.
People who inherit $15 million from wealthy parents are just winners of a different lottery.
But people who inherit $15 million from rich parents did not in fact earn that money. They’re just lucky, winners of a different lottery, except that we don’t tax their big win.
Here’s another tell: defenders of making the exemption permanent say it would provide “certainty” for wealthy families trying to decide how to handle their estates. As a rule of thumb, any time that the tax cuts crowd resorts to talking about certainty, it’s because they don’t have a better argument. (This “certainty argument” is also deployed selectively. The megabill also includes tax cuts on overtime pay, tips and car loan interest and contributions to “Trump accounts” for newborns that will automatically end when Trump leaves office, but no one is arguing that those provisions should be permanent because waiters, parents and car buyers need “certainty.”) Trump ran for office in 2016 claiming that he would raise taxes on himself. Since then, he’s made it clear that one of his primary goals is instead to find every way possible to reward Americans who inherited their wealth. He’ll soon sign another bill into law that proves that point. Subscribe to the Project 47 newsletter to receive weekly updates on and expert insight into the key issues and figures defining Trump’s second term.
Ryan Teague Beckwith is a newsletter editor for MS NOW. He has previously worked for such outlets as Time magazine and Bloomberg News. He teaches journalism at Georgetown University’s School of Continuing Studies and is the creator of Your First Byline. 
