Gettitn rid of taxes altogether would eliminate tax avoidance strategies altogether, what’s your point?
I don’t know if the word “schemes” has a negative connoation for you but it does for meand the trust arrangements are entirely acceptable methods of locking in your exemptions and gift allowances and in some cases allow you to move increases in wealth to your heirs.
The other methods don’t pass the smell test. I don’t know the details and i am not a trusts and estates lawyer but two common rules of taxation are (1)transactions between related parties must be on terms that would occur between third parties conducted at arms length or the tax law will impute arms length pricing and (2) you cannot do indirectly that which you could not do directly.
So for example, if you sue your dad for tripping on his porch and you sue him, the settlement might not be tax free if you are trying to circumvent the estate tax.
If your mom buys your home for enough money to soak up the $500K exemption for primary homes and pays more than market value to do so, then no dice.
If you own an offshore insurance company and your dad buys meteor insurance from you for millions of dollars, we look through that.
Perhaps you can provide some details and I bet I can tell you why it doesn’t work or can only work on very small scales. If it actually works, you and I can hang up our shingle and become millionaires.
Estate planning has more to do with planning the estate and only so much to do with controlling tax exposure.
Someone asked where the “right to inherit” is in the Constitution. I pointed out where. Just like the right to own property does not forbid property tax, neither does the right to inherit forbid estate tax. But both are rights.
My point is that lowering the estate tax would reduce the tax-avoidance strategies. Increasing it will increase such strategies.
Use the word “method” instead, if you like.
People (well, accounting companies) that were providing such methods were, in fact, millionaires. And no, I cannot give you exact details because it was a while ago and they obviously didn’t disclose full details. They did provide some letters from independent auditors that said that the methods were legal, to the best of their knowledge.
OK then, in the context of estate taxes, you admit the right to property is meaningless, correct? BTW, the 5th amendment only prohibits a government taking without due process or compensation, it doesn’t enshrine a property right and certainly doesn’t immunize you from taxes.
And MY point is that this you are using a very stupid argument. Your logic can be used to defend a tax rate of ZERO.
They were probably wrong. and if it was more than a few years ago there have been a series of court cases that have sent folks from KPMG and large law firms to jail because of how bad some of this stuff was.
It does peter out quickly. Nobody on the forbes list is two generations removed from the original creator of wealth, except maybe the Mars(maybe, I couldn’t tell). I live in India, where dynastic accumulation is much talked about, yet the richest people who belong to dynasties are all at most one generation into their riches. Only a couple of exceptions come to mind, and those families(the Tatas) are not personally the richest and are regarded as being the poster children for behaviour that is ‘good for society’. And India has never had an estate tax.
I explicitly clarified that I’m not talking about hypothetical perfectly functioning markets, but markets that exist today. What option do you have that exists today that allocates wealth better than markets that exist today?
Yeah, but 80% of all millionaires also means 80% of all people with more than a million. If dynastic accumulation was the problem you say it is, this number would be much much smaller.
It usually doesn’t. Usually because the children of the rich are probably slackers. And the grandchildren of the rich almost definitely are. You want government to step in with a solution where none is required.