It’s Not Just Income Taxes. Billionaires Don’t Pay Inheritance Taxes Either.
If you are an American citizen with hundreds of millions of dollars in assets, this would be a great time to die. No disrespect intended. It’s just a fact. For seldom have there existed better conditions for transferring vast fortunes to one’s offspring.
A married couple can now leave a total of $23.4 million to the kids without paying a dime in federal estate or capital gains taxes. That’s the highest exemption level in decades, not counting a temporary repeal of the estate tax in 2010. And the opportunities to sidestep inheritance taxes are legion. So much so that when Goldman Sachs alum Gary Cohn, then an adviser to President Donald Trump, kicked a hornet’s nest by reportedly joking that “only morons pay the estate tax,” wealth professionals around the country were no doubt nodding in agreement. (One Cohn defender explained that whatever he may have said, Cohn was merely alluding to rich folks who don’t take advantage of rigorous tax planning.)
America’s ultrawealthy already get away with murder by structuring their finances to avoid income, and therefore income taxes. It’s not rocket science. Anybody with a large trove of invested assets can use those assets as collateral for low-interest loans to fund their lavish lifestyles. Voila! No income. That’s a lot cheaper than selling off chunks of stock, for example, and paying tax on the gains. [Read more.]