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American's 2014 GDP is 17.4 trillion dollars. It seems reasonable to assume that some portion of it will accumulate among the wealthiest class and be inherited
by yongjik 11y ago
American's 2014 GDP is 17.4 trillion dollars.
It seems reasonable to assume that some portion of it will accumulate among the wealthiest class and be inherited. Probably much more than ~0.1%.
- harryh 11y agoRather than comparing to GDP it's probably better to compare to net worth which is about 70 trillion dollars. With an expected lifespan of ~80 years that's roughly 875 billion passed on in any given year. Let's assume that all inheritance taxes are paid by the top 1%. They own about a third of total assets. So that's about 290 billion being passed on. 19 / 290 = 6.5% being paid in inheritance taxes. To high? To low? I dunno, but that's my best guess back of the envelope math.
- asmithmd1 11y agoNice estimates. The nominal US estate tax rate for estates $1M over the exclusion is 40% so I would say your estimate of 6.5% shows how effective the 1% have been at sheltering their wealth from estate tax. The GRAT was invented (and patented[1]) as a way to transfer money tax free after congress closed the GRIT loophole in 1990: https://en.wikipedia.org/wiki/Grantor_retained_annuity_trust https://en.wikipedia.org/wiki/Grantor_retained_annuity_trust [1] https://www.google.com/patents/US6567790 https://www.google.com/patents/US6567790
- harryh 11y agoCompletely separate from the rest of this discussion, but I am amazed that you can patent something like that.