Why Are the Wealthy Paying Fewer Estate Taxes?
Why Are the Wealthy Paying Fewer Estate Taxes?
The estate tax was a hot topic throughout the election process and now that we have a new president-elect it’s sure to get an even closer look when White House leadership changes hands early next year. Or course, both candidates had different views regarding this tax, but it’s interesting to note that despite the possible changes that could be coming, there might be very little actual impact to the revenue collected from this tax.
Reduce Tax Bill
It seems that many high-net-worth individuals have found ways to reduce their estate tax bill, without the help of any new policies. Why is that? How are wealthy individuals avoiding paying more in estate taxes? According to the most recent numbers available from the IRS, taxpayers paid $16.4 billion in federal estate taxes in 2014. Compare that to 2006 when the total was $24.6 billion and it’s clear that the numbers are in decline.
The fact is estate tax dollars only account for 1 percent of all revenue collected by the IRS. So how are the nation’s highest earners – especially those in the top 1 percent – paying so little in estate taxes? One big reason is the increasing number of exemptions that now exist. First off, the exemption threshold has increased to $5.5 million, so anyone who receives less than that is excluded. The top tax rate has also fallen from 70 percent in 1981 to just 40 percent today.
Avoid Tax
Wealthy taxpayers have also learned how to avoid this tax, by implementing many different estate-planning tools, including trusts, like the grantor-retained trust, to help make passing their wealth on much easier and more tax-friendly. Therefore, unless a massive overhaul of the estate tax is implemented it’s likely that wealthy taxpayers will continue to avoid it, or at the very least, minimize its impact.
You also might like the article Estate Tax Repeal of Revision?
http://www.cnbc.com/2016/09/23/how-the-rich-are-paying-less-in-estate-taxes.html
We hope you found this article about “Why are the Wealthy Paying Fewer Estate Taxes?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Do You Owe Money To The IRS?
The vast majority of Americans get a tax refund from the IRS each spring, but what do you do if you are one of those who have received a tax bill? What do you do if you owe money to the IRS and can’t pay? The IRS encourages you to pay the full amount of…
How Some Big Companies Are Maximizing Their Tax Benefit
How Some Big Companies Are Maximizing Their Tax Benefit There’s no question that the IRS is always looking for ways to get every penny they can from the nation’s taxpayers, whether they be individuals or businesses. On the other hand, many are also doing whatever they can to pay as little as possible, some, even…
Federal Government Still Facing Huge Deficit
Federal Government Still Facing Huge Deficit Does it seem like no matter how much money the federal government collects in tax revenue, they will still never have enough? For a lot of people the, answer is a resounding “yes.” The country’s Monthly Treasury Statement lends even more credence to that belief. What does the Treasury…
The IRS is Not a Bully – You can poke a bully in the nose.
The IRS is Not a Bully You can poke a bully in the nose. This is the third installment of “The IRS is Not a Bully” series, identifying taxpayer concerns and the difficult position in which Congress puts the IRS. Namely, applying ever increasing pressure to operate in ways its founders never intended, until it’s…