12 ms·

People mean (at leat) two different things when they're talking about "unrealized gains taxes". 1. Taxing truly unrealized gains 2. Taxing mechanisms people u

People mean (at leat) two different things when they're talking about "unrealized gains taxes". 1. Taxing truly unrealized gains 2. Taxing mechanisms people use to get around gains taxes The main loophole at the moment is the loan loophole: the rich get a loan against their unrealized gains. Then they can spend their unrealized gains without paying taxes on the gains. Closing this loophole is a really good idea, but that's all it is, it's closing a loophole. Calling it a tax on unrealized gains is counter-productive. You'll get much more support if you just call it "closing a loophole". Taking a loan against a gain and other mechanisms of avoiding taxes should be treated as a deemed disposition.

mjevans 2y ago
Just like 'Land Value Tax' needs a mechanism of market evaluation of property (and current use / contents) value as a fix, I think a similar solution can apply to taxes. Require a reporting of all liquid cash, property of substantive (resellable) value, and 'investments' of any sort. Liabilities could also be considered for a literal Net Worth tax. In that evaluation the 'self loan' loophole should equal out to cash on hand / value and also an unpaid liability.
- alchemist1e9 2y ago
  “I have never understood why it is ‘greed’ to want to keep the money you have earned but not greed to want to take somebody else’s money.”
  - HideousKojima 2y ago
    Because as Jesus said, "If there be any poor among you, do not give of your substance to them. Rather, have the Romans take it from that rich jerk down the road at spear-point and have them give a pittance to the poor and waste the rest on bureaucracy and wars."
    - spencerflem 2y ago
      Jesus was famous for upturning the tables of the money lenders, and their church has a tithe
      - HideousKojima 2y ago
        Both of which are fine by me, and neither of which are state enforced resdistribution schemes to (allegedly) help the poor, so what's your point?
        spencerflem 2y ago
        My point is, Jesus is not a good source to say that having Billionaires and Hundred Billionaires are OK, Here's an actual quote, not a made up sarcastic one "Then Jesus said to his disciples, “Truly I tell you, it is hard for someone who is rich to enter the kingdom of heaven. 24 Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.” and that the church itself runs one of the biggest "redistribution schemes"
        HideousKojima 2y ago
        And I completely agree with what Jesus said. But that's something between the wealthy and God, not the wealthy and the state. And once again, various Christian churches' tithe and charity systems are voluntary, not enforced by state violence.
        spencerflem 2y ago
        Are you an anarchist? Because there's some argument there, I'm not writing it off. But in your world, does the govt use violence to stop people from doing what they want? For enforcing things like labor contracts? (a made up legal fiction that can only exist in the context of a state) If no: I commend you for imagining a world free from state violence. I don't have the vision for it myself but I can respect that. if yes: 1. Who funds the police, & 2. Why is violence legal only when done by the rich?
  - spencerflem 2y ago
    Its not possible to become fantastically rich without the support of a state, or by essentially being a state. For Amazon to work, they need the roads that the govt built, the internet the govt invented, the cable the govt subsidised, the military and the police to protect their shipments and keep the workers in line, the courts to handle disputes and a million other things. Corporations themselves are a legal fiction made up by the state. Its incredibly fair to tax for this and Could Not Possibly work any other way. And on top of that, come on: look at https://mkorostoff.github.io/1-pixel-wealth/?v=3 https://mkorostoff.github.io/1-pixel-wealth/?v=3 and tell me that having hundreds of billions of dollars isn't greedy. 10 million (ie. thirty thousand times less) and you can retire in luxury.
    - glimshe 2y ago
      Relative luxury. It gets you a great house, frequent travel, nice cars every year. But no jets or truly luxurious real estate (which would cost more than that alone). Still, I hear you.
    - alchemist1e9 2y ago
      Thank you for at least being able to understand the most crucial and important function of the state is to create well regulated markets with law and order, along with property and individual rights they are necessary preconditions to capitalism. commentators have confused either oligarchy or anarchy for liberalism and capitalism. This is a profound cultural and educational failure that capitalism has been slandered in this way. Unfortunately the rest you likely have completely misunderstood. fwiw you visualization is very silly so much of reality makes no sense on linear scales, I suggest you use logarithmic scales and it all makes perfect sense. Unless a crony capitalist has corrupted the state to gain unfair advantage, has monopoly power, or is providing unnecessary services or providing weapons for war and embezzling public funds, then when they are successful they earned their “unearned” income in capital gains by providing a valuable service to the society. The impulse to strike them down and steal their capital is frankly disgusting and embarrassing. Nothing but Envy masquerading as Empathy!
      - spencerflem 2y ago
  - kevin_thibedeau 2y ago
    Go live in a paradise like Somalia and keep your riches for yourself. Or if you want to live in civilization, you have to pay your share for the infrastructure and social stability that you reap the benefit of.
    - HideousKojima 2y ago
      Why would they want to live in the smoldering remains of a failed attempt at socialism? https://en.m.wikipedia.org/wiki/Somali_Democratic_Republic https://en.m.wikipedia.org/wiki/Somali_Democratic_Republic
      - piva00 2y ago
        Then perhaps they could go live in Liberia, the smoldering remains of a failed attempt at libertarianism.
        alchemist1e9 2y ago
        Are you insane? an authoritarian dictator seizing power in a military coup and then embezzling all the wealth, printing money from the central bank, violating property rights and individual rights, using identity politics and attempting ethnic cleansing, and destroying free speech seem to be the absolute polar opposite of libertarianism! Isn’t it a perfect example of government failure and collectivism and authoritarianism creating death and destruction?
    - alchemist1e9 2y ago
      How to tell me you have zero understanding of libertarianism and capitalism without telling me!
  - _uhtu 2y ago
    The money in this case is capital gains, which is fundamentally not "earned" income, it's income obtained by just having money.
    - alchemist1e9 2y ago
      I can see your training is now complete my dear socialist! It’s incredible how our education systems fail to teach the most basic economic realities to people. Capital gains result from allocating capital wisely and taking massive risk. This actually makes them very well “earned” in the one system that is most responsibly for the improvement of the human condition than any other system ever conceived by humans - hint: because it’s organic and natural! In contrast your socialist nonsense is an ideology based on Envy masquerading as Empathy. It is responsible for the most death and destruction by any system conceived by humans - hint: it’s because it’s evil and artificial! To attempt to steal from and punish the very capitalists responsible for lifting humanity up and forward due to Sloth and Envy is truly disgusting! It’s very interesting that extensive propaganda has somehow convinced newer generations that libertarian capitalism is actually anarchy, which it is absolutely not, if fact it’s not even related. Liberalism in the classic sense, and therefore libertarian capitalism, requires a strict government enforcement of property rights, individual rights, rule of law, and (extremely important!) to it’s health functioning a well regulated markets free from corruption! anarchy and oligarchy have no relation to capitalism! You are confused my dear socialist. Please help yourselves and learn the truth. Don’t live your lives consumed by the evils of Envy and Sloth! https://iea.org.uk/wp-content/uploads/2019/02/Niemietz-Socialism.pdf https://iea.org.uk/wp-content/uploads/2019/02/Niemietz-Socia...
      - greyface- 2y ago
        The IRS classifies "taxable interest, ordinary dividends, and capital gain distributions" as "unearned income" and "salaries, wages, tips" as "earned income" (see e.g. Form 1040 instructions). Are you suggesting that the IRS is pushing socialist propaganda?
        alchemist1e9 2y ago
ahepp 2y ago
It seems to me that the loan loophole could be closed simply by not readjusting capital gains basis upon death.
- johngladtj 2y ago
  The adjustment is to compensate for the estate tax that takes a far higher amount than the capital gains tax. Up to 40% of assets.
  - NavinF 2y ago
    It also accounts for the fact that 60 year old investments don't have any documentation for cost basis. It's long forgotten
  - HDThoreaun 2y ago
    27 million is completely untaxed. Beyond that you can use trusts to avoid the estate tax.
snapplebobapple 2y ago
That will be a painful one to attempt to fix because a lot of lending we likely want to happen happens secured by an asset with unrealized cap gains. Basically the whole real estate system depends on this lending as does corporate lending. The deleveraging doing the above wrong will cause eill be awesome.
hd4 2y ago
Those two things just boil down to "you own a thing, you pay tax on the thing".
- olalonde 2y ago
  That's called a wealth tax and is a different kind of tax. Very few countries have one.
modeless 2y ago
Loans are not a loophole. They only delay the tax. You still pay it later. If your investments keep growing, your tax liability grows too. In the meantime the interest costs you money, and that money is also taxed on the recipient's side. The only loophole is stepped-up basis on death. That is where the tax is erased. Fix that and the buy-borrow-die strategy doesn't work. "Die" is an essential part of the strategy.
- Eddy_Viscosity2 2y ago
  "die" is a part of the strategy but its also 100% going to happen. The end result is the person, while living, gets the benefit of the unrealized gains, which is the same as realizing those gains, tax free. When (not if) they die, the taxes are much less. So yes it is a loophole.
  - modeless 2y ago
    The taxes are not less. Almost certainly more. Until stepped-up basis erases them. Eliminate stepped-up basis and you kill the strategy. Stepped-up basis is the only loophole here.
- EPWN3D 2y ago
  That is sort of true. The real benefit of a margin loan is that you can borrow against assets you've held less than a year to avoid the gains being taxed as ordinary income. Then when they've matured, you can sell them and only pay a 15% or 20% tax on the gains (depending on your active income). But even outside of that, margin loans are a way to bet on your holdings growing faster than your loan's interest rate, irrespective of taxation. This kind of thing became popular in the last decade because interest rates were near-zero, but it makes a lot less sense in today's macro climate. A margin loan today is a much riskier, more expensive proposition. It's not like before where you could get one with a 3% interest rate. Moreover, the progressive pearl-clutching about margin loans overlooks the flip side: the margin call. Yes, it's a great strategy for avoiding some taxes, but it's not like it's zero-risk. While trying to avoid some taxes, you can wind up losing a big chunk of your holdings because the market had a bad week. Maybe it's appropriate to put a reasonable limit on the total debt an individual can take on against their capital holdings or something, but if you've got a portfolio that you think will grow at 15% YoY, and you want to give it the opportunity to do that while getting some cash in the short term, I don't see the problem if there's a financial institution willing to make that loan.
opo 2y ago
>...The main loophole at the moment is the loan loophole: the rich get a loan against their unrealized gains. The last time this came up, it was a link to someone posting on reddit basically claiming they were a $2,500 per hour lawyer setting this up. The basic idea was that there were lenders giving multi-decade loans at a tiny interest rate (only payable upon death with also sharing a % share of the gains). Maybe there are lenders who don't understand the time value of money, but no one has actually provided any statistics showing this is actually a common loophole. According to this: https://finance.yahoo.com/news/jeff-bezos-sell-5-billion-185303024.html https://finance.yahoo.com/news/jeff-bezos-sell-5-billion-185... Bezos has sold around $13.4 billion in stock in 2024. If he could easily avoid millions (maybe billions) of dollars of capital gains tax by this one simple trick, why didn't he?
- modeless 2y ago
  The truth is that if you expect to live more than a few years and you spend more than ~1% of your wealth per year, you can't use the buy-borrow-die strategy. The loan interest will eat you alive long before you die. Compounding works against you here. (You can't just charge 0% interest either, the IRS thought of that and they set minimum rates.) If you just pay capital gains instead, you can spend a lot more before you die. And what good is money you can't spend before you die? Buy-borrow-die only makes sense if you are super wealthy (like $100m+) and don't want to touch the money while you are alive, but you want to maximize how much you pass on to your family after you die (when stepped-up basis kicks in to erase the capital gains tax). It's way overblown; it's really not something most rich people are going to do. But I would be in favor of eliminating stepped-up basis on death to get rid of it.
- HDThoreaun 2y ago
  Bezos is afaik the only big tech founder who actually sells stock. It's public knowledge when insiders sell stock and as far as I can see Bezos is the only one who does so consistently.
anigbrowl 2y ago
I don't understand why securing a loan with stock isn't considered a taxable event to begin with.
- pjerem 2y ago
  I’m not rich enough to know but is it an official, written, securing or isn’t just the bank ok to emit the loan since they just trust you because they know you are rich ? Especially if the loan is just a fraction of your wealth and you have a good history, the bank would probably agree to grant you the loan without real guarantee.
- RhysU 2y ago
  Is securing a home equity loan a taxable event? Is securing a college loan? Is securing a car loan? What's different about the case for stock? The house, future earnings, and car are different sorts of collateral. If stock is different materially, then is margin trading a taxable event? Should municipalities incur income when they issue tax-backed bonds? Those tax-backed bonds have stock-like collateral. For all everyone loves to hate on borrow-die strategies, I have never seen anyone quantify the tax revenue "lost" to the "loophole". The actual loophole is the estate tax not applying to most people. Tax estates from $1 onward. That'll raise real funds and is arguably universally fair. Or, tax no estates which is also arguably fair. Either way reduces distortions in the tax code.

mjevans 2y ago

Just like 'Land Value Tax' needs a mechanism of market evaluation of property (and current use / contents) value as a fix, I think a similar solution can apply to taxes. Require a reporting of all liquid cash, property of substantive (resellable) value, and 'investments' of any sort. Liabilities could also be considered for a literal Net Worth tax. In that evaluation the 'self loan' loophole should equal out to cash on hand / value and also an unpaid liability.

alchemist1e9 2y ago
“I have never understood why it is ‘greed’ to want to keep the money you have earned but not greed to want to take somebody else’s money.”
- HideousKojima 2y ago
  Because as Jesus said, "If there be any poor among you, do not give of your substance to them. Rather, have the Romans take it from that rich jerk down the road at spear-point and have them give a pittance to the poor and waste the rest on bureaucracy and wars."
  - spencerflem 2y ago
    Jesus was famous for upturning the tables of the money lenders, and their church has a tithe
    - HideousKojima 2y ago
      Both of which are fine by me, and neither of which are state enforced resdistribution schemes to (allegedly) help the poor, so what's your point?
      - spencerflem 2y ago
        My point is, Jesus is not a good source to say that having Billionaires and Hundred Billionaires are OK, Here's an actual quote, not a made up sarcastic one "Then Jesus said to his disciples, “Truly I tell you, it is hard for someone who is rich to enter the kingdom of heaven. 24 Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.” and that the church itself runs one of the biggest "redistribution schemes"
        HideousKojima 2y ago
        And I completely agree with what Jesus said. But that's something between the wealthy and God, not the wealthy and the state. And once again, various Christian churches' tithe and charity systems are voluntary, not enforced by state violence.
        spencerflem 2y ago
        Are you an anarchist? Because there's some argument there, I'm not writing it off. But in your world, does the govt use violence to stop people from doing what they want? For enforcing things like labor contracts? (a made up legal fiction that can only exist in the context of a state) If no: I commend you for imagining a world free from state violence. I don't have the vision for it myself but I can respect that. if yes: 1. Who funds the police, & 2. Why is violence legal only when done by the rich?
- spencerflem 2y ago
  Its not possible to become fantastically rich without the support of a state, or by essentially being a state. For Amazon to work, they need the roads that the govt built, the internet the govt invented, the cable the govt subsidised, the military and the police to protect their shipments and keep the workers in line, the courts to handle disputes and a million other things. Corporations themselves are a legal fiction made up by the state. Its incredibly fair to tax for this and Could Not Possibly work any other way. And on top of that, come on: look at https://mkorostoff.github.io/1-pixel-wealth/?v=3 https://mkorostoff.github.io/1-pixel-wealth/?v=3 and tell me that having hundreds of billions of dollars isn't greedy. 10 million (ie. thirty thousand times less) and you can retire in luxury.
  - glimshe 2y ago
    Relative luxury. It gets you a great house, frequent travel, nice cars every year. But no jets or truly luxurious real estate (which would cost more than that alone). Still, I hear you.
  - alchemist1e9 2y ago
    Thank you for at least being able to understand the most crucial and important function of the state is to create well regulated markets with law and order, along with property and individual rights they are necessary preconditions to capitalism. commentators have confused either oligarchy or anarchy for liberalism and capitalism. This is a profound cultural and educational failure that capitalism has been slandered in this way. Unfortunately the rest you likely have completely misunderstood. fwiw you visualization is very silly so much of reality makes no sense on linear scales, I suggest you use logarithmic scales and it all makes perfect sense. Unless a crony capitalist has corrupted the state to gain unfair advantage, has monopoly power, or is providing unnecessary services or providing weapons for war and embezzling public funds, then when they are successful they earned their “unearned” income in capital gains by providing a valuable service to the society. The impulse to strike them down and steal their capital is frankly disgusting and embarrassing. Nothing but Envy masquerading as Empathy!
    - spencerflem 2y ago
- kevin_thibedeau 2y ago
  Go live in a paradise like Somalia and keep your riches for yourself. Or if you want to live in civilization, you have to pay your share for the infrastructure and social stability that you reap the benefit of.
  - HideousKojima 2y ago
    Why would they want to live in the smoldering remains of a failed attempt at socialism? https://en.m.wikipedia.org/wiki/Somali_Democratic_Republic https://en.m.wikipedia.org/wiki/Somali_Democratic_Republic
    - piva00 2y ago
      Then perhaps they could go live in Liberia, the smoldering remains of a failed attempt at libertarianism.
      - alchemist1e9 2y ago
        Are you insane? an authoritarian dictator seizing power in a military coup and then embezzling all the wealth, printing money from the central bank, violating property rights and individual rights, using identity politics and attempting ethnic cleansing, and destroying free speech seem to be the absolute polar opposite of libertarianism! Isn’t it a perfect example of government failure and collectivism and authoritarianism creating death and destruction?
  - alchemist1e9 2y ago
    How to tell me you have zero understanding of libertarianism and capitalism without telling me!
- _uhtu 2y ago
  The money in this case is capital gains, which is fundamentally not "earned" income, it's income obtained by just having money.
  - alchemist1e9 2y ago
    I can see your training is now complete my dear socialist! It’s incredible how our education systems fail to teach the most basic economic realities to people. Capital gains result from allocating capital wisely and taking massive risk. This actually makes them very well “earned” in the one system that is most responsibly for the improvement of the human condition than any other system ever conceived by humans - hint: because it’s organic and natural! In contrast your socialist nonsense is an ideology based on Envy masquerading as Empathy. It is responsible for the most death and destruction by any system conceived by humans - hint: it’s because it’s evil and artificial! To attempt to steal from and punish the very capitalists responsible for lifting humanity up and forward due to Sloth and Envy is truly disgusting! It’s very interesting that extensive propaganda has somehow convinced newer generations that libertarian capitalism is actually anarchy, which it is absolutely not, if fact it’s not even related. Liberalism in the classic sense, and therefore libertarian capitalism, requires a strict government enforcement of property rights, individual rights, rule of law, and (extremely important!) to it’s health functioning a well regulated markets free from corruption! anarchy and oligarchy have no relation to capitalism! You are confused my dear socialist. Please help yourselves and learn the truth. Don’t live your lives consumed by the evils of Envy and Sloth! https://iea.org.uk/wp-content/uploads/2019/02/Niemietz-Socialism.pdf https://iea.org.uk/wp-content/uploads/2019/02/Niemietz-Socia...
    - greyface- 2y ago
      The IRS classifies "taxable interest, ordinary dividends, and capital gain distributions" as "unearned income" and "salaries, wages, tips" as "earned income" (see e.g. Form 1040 instructions). Are you suggesting that the IRS is pushing socialist propaganda?
      - alchemist1e9 2y ago

ahepp 2y ago

It seems to me that the loan loophole could be closed simply by not readjusting capital gains basis upon death.

johngladtj 2y ago
The adjustment is to compensate for the estate tax that takes a far higher amount than the capital gains tax. Up to 40% of assets.
- NavinF 2y ago
  It also accounts for the fact that 60 year old investments don't have any documentation for cost basis. It's long forgotten
- HDThoreaun 2y ago
  27 million is completely untaxed. Beyond that you can use trusts to avoid the estate tax.

snapplebobapple 2y ago

That will be a painful one to attempt to fix because a lot of lending we likely want to happen happens secured by an asset with unrealized cap gains. Basically the whole real estate system depends on this lending as does corporate lending. The deleveraging doing the above wrong will cause eill be awesome.

hd4 2y ago

Those two things just boil down to "you own a thing, you pay tax on the thing".

olalonde 2y ago
That's called a wealth tax and is a different kind of tax. Very few countries have one.

modeless 2y ago

Loans are not a loophole. They only delay the tax. You still pay it later. If your investments keep growing, your tax liability grows too. In the meantime the interest costs you money, and that money is also taxed on the recipient's side. The only loophole is stepped-up basis on death. That is where the tax is erased. Fix that and the buy-borrow-die strategy doesn't work. "Die" is an essential part of the strategy.

Eddy_Viscosity2 2y ago
"die" is a part of the strategy but its also 100% going to happen. The end result is the person, while living, gets the benefit of the unrealized gains, which is the same as realizing those gains, tax free. When (not if) they die, the taxes are much less. So yes it is a loophole.
- modeless 2y ago
  The taxes are not less. Almost certainly more. Until stepped-up basis erases them. Eliminate stepped-up basis and you kill the strategy. Stepped-up basis is the only loophole here.
EPWN3D 2y ago
That is sort of true. The real benefit of a margin loan is that you can borrow against assets you've held less than a year to avoid the gains being taxed as ordinary income. Then when they've matured, you can sell them and only pay a 15% or 20% tax on the gains (depending on your active income). But even outside of that, margin loans are a way to bet on your holdings growing faster than your loan's interest rate, irrespective of taxation. This kind of thing became popular in the last decade because interest rates were near-zero, but it makes a lot less sense in today's macro climate. A margin loan today is a much riskier, more expensive proposition. It's not like before where you could get one with a 3% interest rate. Moreover, the progressive pearl-clutching about margin loans overlooks the flip side: the margin call. Yes, it's a great strategy for avoiding some taxes, but it's not like it's zero-risk. While trying to avoid some taxes, you can wind up losing a big chunk of your holdings because the market had a bad week. Maybe it's appropriate to put a reasonable limit on the total debt an individual can take on against their capital holdings or something, but if you've got a portfolio that you think will grow at 15% YoY, and you want to give it the opportunity to do that while getting some cash in the short term, I don't see the problem if there's a financial institution willing to make that loan.

opo 2y ago

>...The main loophole at the moment is the loan loophole: the rich get a loan against their unrealized gains. The last time this came up, it was a link to someone posting on reddit basically claiming they were a $2,500 per hour lawyer setting this up. The basic idea was that there were lenders giving multi-decade loans at a tiny interest rate (only payable upon death with also sharing a % share of the gains). Maybe there are lenders who don't understand the time value of money, but no one has actually provided any statistics showing this is actually a common loophole. According to this: https://finance.yahoo.com/news/jeff-bezos-sell-5-billion-185303024.html https://finance.yahoo.com/news/jeff-bezos-sell-5-billion-185... Bezos has sold around $13.4 billion in stock in 2024. If he could easily avoid millions (maybe billions) of dollars of capital gains tax by this one simple trick, why didn't he?

modeless 2y ago
The truth is that if you expect to live more than a few years and you spend more than ~1% of your wealth per year, you can't use the buy-borrow-die strategy. The loan interest will eat you alive long before you die. Compounding works against you here. (You can't just charge 0% interest either, the IRS thought of that and they set minimum rates.) If you just pay capital gains instead, you can spend a lot more before you die. And what good is money you can't spend before you die? Buy-borrow-die only makes sense if you are super wealthy (like $100m+) and don't want to touch the money while you are alive, but you want to maximize how much you pass on to your family after you die (when stepped-up basis kicks in to erase the capital gains tax). It's way overblown; it's really not something most rich people are going to do. But I would be in favor of eliminating stepped-up basis on death to get rid of it.
HDThoreaun 2y ago
Bezos is afaik the only big tech founder who actually sells stock. It's public knowledge when insiders sell stock and as far as I can see Bezos is the only one who does so consistently.

anigbrowl 2y ago

I don't understand why securing a loan with stock isn't considered a taxable event to begin with.

pjerem 2y ago
I’m not rich enough to know but is it an official, written, securing or isn’t just the bank ok to emit the loan since they just trust you because they know you are rich ? Especially if the loan is just a fraction of your wealth and you have a good history, the bank would probably agree to grant you the loan without real guarantee.
RhysU 2y ago
Is securing a home equity loan a taxable event? Is securing a college loan? Is securing a car loan? What's different about the case for stock? The house, future earnings, and car are different sorts of collateral. If stock is different materially, then is margin trading a taxable event? Should municipalities incur income when they issue tax-backed bonds? Those tax-backed bonds have stock-like collateral. For all everyone loves to hate on borrow-die strategies, I have never seen anyone quantify the tax revenue "lost" to the "loophole". The actual loophole is the estate tax not applying to most people. Tax estates from $1 onward. That'll raise real funds and is arguably universally fair. Or, tax no estates which is also arguably fair. Either way reduces distortions in the tax code.