Tag: estate taxes

Estate Taxes And the (Clinton) Family Business

 

Hillary-MoneyTimothy Carney of the Washington Examiner recently wrote:

The Clintons may be stupid-rich, but they aren’t stupid—they’re using estate-planning techniques to avoid the estate tax. Bloomberg News reported in 2014 that the Clinton family home has been divided, for tax purposes, into two shares, and those shares have been placed in a special trust that will shield Chelsea from having to pay the estate tax on the full value of the home when she inherits it. Also, the Clintons have created a life insurance trust—a common tool wealthy people use to provide liquidity for heirs to pay the estate tax.

He continues:

The Estate Tax: an Explanation and a Modest Proposal

 

shutterstock_222504601As a lawyer, I spent a good part of my career helping people and families transfer wealth from one generation to the next in the most wholesome way possible. Though I’m not quite a specialist, this gave me some insight into estate tax system, why it doesn’t work, and what we should do with it.

As Americans, we are born into a state of liberty, meaning we have self-ownership and the freedoms to voluntarily exchange our labor for property and that property for other property as we see fit. The mix of property that we own when we, as P. G. Woodehouse wrote, “turn in our dinner pail” is our estate. When smart, hardworking (and lucky) Americans do this for a few decades, those estates can become quite large.

Teddy Roosevelt (prep school, Harvard, Columbia) inherited such an estate, freeing him to pursue unproductive activities full-time. This, oddly, led him to believe that allowing very productive individuals to pass on large estates to their children leads to a dangerous concentration of wealth in the hands of a few. The estate tax started out modestly enough, went up and down during and after World War I, until another patrician Roosevelt (prep school, Harvard, Columbia) came along. Roosevelt and his New Deal Democrats blamed the Great Depression on a conspiracy of rich people, and they have been doing it ever since.

Member Post

 

Along with a laundry list of other tax increases,  President Obama will reportedly recommend ending the tax code provision called “stepped up basis”  Most of us would rather have a root canal than think about the tax code, but this is an extremely harmful change for the parts of the economy that work with real […]

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