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Culture War Roundup for the week of October 2, 2023

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Currently U.S. exempts the first $13 million ($26 million for a married couple) of wealth transferred that way from any taxation.

Even capital gains tax?

Except capital gains from tax-deferred accounts. If you inherit an IRA you pay taxes on the distributions, but if you inherit appreciated stock the basis is reset on death.

Plus $30,000 a year tax free, and you can transfer the $26 million before you die so that it can compound nicely. You gradually give the money to your grandchildren before you die. By the time you die and have to pay inheritance tax, they already have a gigantic nest egg built up from the tax free $26 million + $30k/year you left them.

This is just stuff off the top of my head. Better strategies no doubt exist.

The problem is that the wealthy are great at skirting inheritance taxes, but anything we do to stop them will catch the not-truly-wealthy farmers and small business owners in its snare.

There are some real zany strategies for maximizing the tax-free value of assets transferred during your life for eventually distribution to your descendants.

I think the grand mack daddy of all tax 'cheats' has to be Peter Thiel managing to slide 5 billion into a Roth IRA which means it has no tax whenever he chooses to withdraw it later in life.

That's insane. Saving people a click...

He got sweetheart deals on private company stock and bought small amounts which turned into huge amounts.

Sometimes I marvel at how shortsighted and uncreative lawmakers can be when they write laws. For the love of God, put a cap on every law. Doesn't matter how high, just add a cap. I'm sure if someone said "maybe we should cap Roths at $100 million" people would have laughed. But here we are.

Like, for example, if the original Social Security law said "under no circumstances shall Social Security spending be more than 1% of GDP", people in 1934 would have laughed. "Lol, that will never happen". And here are again.

Thiel did not get a “sweetheart deals on private company stock and bought small amounts”. He created this stock by founding a company, and made it a lot more valuable through his efforts.

Even worse. Thank you for the clarification.