Quantcast

His Billionaire Buddies Will Easily Evade Biden’s Taxes on the ‘Wealthy’

'We don't think that the [Biden] proposal has a lot of teeth...'

The Biden administration is rumbling again about making tech (and other) billionaires pay at increased capital gains and income tax rates in order to help pay for his proposed $6 trillion budget.

“I think you should be able to become a billionaire or a millionaire,” Biden told Congress about the proposed tax increases. “But pay your fair share.”

Despite the big talk by Biden, rich people most often avoid taxes, especially well-connected billionaires who often donate to the Democrat Party.

Biden has warned that he is seeking increase income taxes and increase capital gains taxes for billionaires while abolishing the step-up-in-basis accounting that often delays taxes.

...article continued below
- Advertisement -

Of the various proposals to soak the rich, none of them would apply to billionaires who have a host of options to legally avoid paying taxes.

First off, billionaires can limit the amount of income they realize.

To limit the payment of capital gains taxes, the ultra-rich can deploy dynasty trust accounts, for example, whereby they lose control of the assets but still get an income from the assets in order to avoid such taxes.

The trusts then are subject to normal capital gains taxes, while any income going to trust beneficiaries, like heirs, is taxed at normal income tax rates.

...article continued below
- Advertisement -

Outside of death, capital gains taxes are also easily avoided by billionaires refusing to sell shares and thus not realize a capital gain.

If there is no gain, there is no tax.

However, by taxing capital gains at death, as Biden proposes, the government will seek to impose both a 40% estate tax and then, on top of it, a 43.4% capital gains tax on any unrealized gains, netting an 83.4% tax on any billionaire who doesn’t have competent counsel to set up a trust.

Of course, few billionaires will put themselves into the position to even pay a 40% estate tax, much less both an estate tax and a 43.4% capital gains tax when there are so many ways to legally avoid such taxes.

“We don’t think that the [Biden] proposal has a lot of teeth,” said John Ricco, director of policy analysis at the Penn Wharton Budget Model, a non-partisan fiscal policy research group at the business school. “There are a lot of games you can play to avoid paying this tax.”

And the billionaires know it.

Copyright 2022. No part of this site may be reproduced in whole or in part in any manner without the permission of the copyright owner. To inquire about licensing content, use the contact form at https://headlineusa.com/advertising.
- Advertisement -
- Advertisement -
- Advertisement -

TRENDING NOW

- Advertisement -
- Advertisement -

- Advertisement -