Commentary on the New York Times article by Paul Sullivan
Donald Trump’s victory in the U.S. presidential election could make it much easier to build dynastic levels of wealth for the country’s richest, the New York Times writes.
No Death Tax, No Capital Gains on Unsold Assets
For starters, Trump has promised to entirely do away with the estate tax, or the “death tax,” as he calls it, according to the Times.
The current rule, which requires a married couple to pay a 40% tax on anything above $10.9 million of their estate, exempts more than 99% of Americans, according to the publication.
Under Trump’s proposal, the Internal Revenue Service would not have been able to collect $17 billion from the 4,918 federal estate tax returns it collected last year, the Times writes.
Furthermore, heirs would never need to pay a capital gains tax on assets as long as they don’t sell them, according to the publication.
Trump’s tax plan also includes an income tax provision to cap itemized deductions at $200,000 per couple and an estate tax provision to disallow contributions of appreciated assets into charities set up the decedent or the decedent’s family, the Times writes. Financial advisors say this would reduce incentives for the wealthy to be philanthropic, according to the Times.
Tax advisors say that Trump may also repeal the gift and generation-skipping taxes, although his proposal doesn’t cover them outright, the publication writes. Killing these taxes would effectively allow the wealthy to reduce their income tax burdens by gifting assets to family members in a lower tax bracket, according to the Times.
Furthermore, Trump’s election will likely leave in place the tax benefits enjoyed by family limited partnerships, the publication writes. Finally, Trump’s proposals also include dropping income tax rates as well as repealing the 3.8% investment income tax, which was used to cover the Affordable Care Act under President Barack Obama, according to the Times.