Billionaires and the 1% are using 'dynasty trusts' to avoid estate and gift taxes -- forever.
The fate of President Joe Biden’s Build Back Better plan to help working American families afford the necessities of life and combat the climate crisis — all paid for with fairer taxes on the rich and corporations — remains uncertain.
But even in the plan’s original, most robust form, proposed tax hikes failed to confront a serious threat to America’s economy and society: trusts that multiply the fortunes of mega-rich families tax-free — forever. Congress still has a chance to correct this omission.
The rich have always passed their money down to heirs, but a “dynasty trust” is a relatively new and highly troubling mechanism. This trust ensures huge family fortunes grow faster over generations by avoiding estate and related taxes meant to guard against economic oligarchy. Exploiting estate- and gift-tax loopholes, America’s billionaires and other super-rich are poised to transfer, largely tax-free, an estimated $21 trillion of wealth to their descendants over the next 25 years.
The rest of us will lose out on trillions of dollars (our rough estimate is $8 trillion) in revenue that otherwise would be collected if the U.S. system of taxing the intergenerational transfer of great wealth worked as originally intended. Those trillions will be unavailable for schools, housing, healthcare, childcare and fighting the climate crisis that threatens us all, rich and poor.
https://www.marketwatch.com/story/billionaires-and-the-1-are-using-dynasty-trusts-to-avoid-estate-and-gift-taxes-forever-congress-needs-to-stop-them-11650910563
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