Thursday, February 03, 2022

Feathering the Family Nest

 


Loopholes in the U.S. tax code have made the payment of estate, gift, and generation-skipping taxes effectively optional for the "ultrawealthy." Over the next 24 years, the richest American families could avoid paying about $8.4 trillion in taxes, while passing $21 trillion on to heirs. 

The Americans for Tax Fairness report—entitled Dynasty Trusts: Giant Tax Loopholes that Supercharge Wealth Accumulation - details how loopholes have made the payment of estate, gift, and generation-skipping taxes—collectively called wealth-transfer taxes—effectively optional for the "ultrawealthy" and thereby accelerate the "accumulation of dynastic wealth."

"Ultrarich families use dynasty trusts—the term for a variety of wealth-accumulating structures that remain in place for multiple generations—to ensure their fortunes cascade down to children, grandchildren, and beyond undiminished by wealth-transfer taxes," the report explains.

Some U.S. states, such as South Dakota, have even changed their laws on dynasty trusts to attract wealthy residents.

The lobbyist group, Patriotic Millionaires, said, "There's no denying our economy and democracy are rigged in favor of the ultra-wealthy. When the richest 100 Americans have 60,000 times more political power than the bottom 90% of people— it's time to get dynastic wealth under control."

Tax-Dodging Billionaire Dynasties Could Cost US $8.4 Trillion: Report (commondreams.org)

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