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I wouldn't call it a huge, huge cost. In the US it is the equivalent of being in the higher tax bracket on the portion that falls above the exclusion amount.
by daveguy 10y ago
I wouldn't call it a huge, huge cost. In the US it is the equivalent of being in the higher tax bracket on the portion that falls above the exclusion amount. If the value of the estate is $5.45 million or less then you pay zero in estate taxes. ZERO. Only the top 0.2% of estates pay any estate taxes and that is only on the value above the exclusion amount ($5.45 million).
- darawk 10y agoYa I was talking specifically about for high-net worth individuals, though. If you are worth 100 million, you're paying ~50 million in tax when you die. That's certainly worth sheltering.
- daveguy 10y agoor ~37.8 million, but ya. If your net worth is 100 million your kids should definitely get 100 million instead of 62 million. They practically earned it and definitely deserve it for being your kids. You wouldn't want them to wind up destitute. Tell me this. If you hired your kids for a year and paid them 100 million dollars to do the job of being your kids how much would they pay in taxes? The answer is about $40 million. In the US transfer of wealth is taxed whether its salary or just for the sake of little Johnny. Loopholes should be closed (if they were even legal loopholes to begin with).
- darawk 10y ago? You're arguing against something I didn't say. I wasn't saying they should shelter it, or that they deserve to keep it. I'm saying that they're strongly incentivized to, so it makes sense that many of them would attempt it.
- daveguy 10y ago+2 it's a good point. Closing loopholes and enforcing large fines should help disincentivize the sheltering. If the loopholes are legal, just closing them will help tremendously. I am sure that "legally save me as much money as possible" is a common phrase heard by CPAs.