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It is sort of interesting how Gen X is screwed here. Also the children of Gen X eg under 18s and younger Gen Z today.
> Mr. Pearl noted that people with only a couple of million can use “securities-based loans,” borrowing low-cost funds from banks using the value of a given investment portfolio as collateral. “You just loan yourself money,” he explained, and in many if not most cases, the portfolio’s rate of return exceeds the rate of interest on the loan. It seems like a step is missing here. Wouldn’t the borrower have to sell part…
Meanwhile the estate tax in the US only applies to inheritances larger than $12.9 million. People with that kind of wealth also know how to start planning early to avoid the tax, so the tax is practically ineffectual. A fairer inheritance tax could go a long way to fixing the worsening wealth gap in America.
$12.9 is per estate, not per heir. If someone has one spouse and 3 kids and also leaves by will some stuff to 6 other relatives, then the exemption is split between the 10. Each benefits on average from an exemption of $1.3 MM. At the highest tax bracket, they get a one time tax deduction of about half a million. When people talk about wealth gap, they mean the ultra-rich, the multi-millionaires. For someone with a n…
Meanwhile, if you did not inherit one and don't work in IT, expect to work hard and spend the majority of earnings on rent/mortgage.
This applies nontheless even if all of your ancestors were lower middle or working class.
¥ Which she got from the state basically just for being there.
> Mr. Pearl noted that people with only a couple of million can use “securities-based loans,” borrowing low-cost funds from banks using the value of a given investment portfolio as collateral. “You just loan yourself money,” he explained, and in many if not most cases, the portfolio’s rate of return exceeds the rate of interest on the loan. It seems like a step is missing here. Wouldn’t the borrower have to sell part…
Another aspect of this arrangement: you don't pay federal income tax on money you receive as a loan in the US. The money does not count as income because of the matching obligation to pay it back.
I borrowed just shy of a million dollars to buy my house. That money sure wasn't income...
Meanwhile the estate tax in the US only applies to inheritances larger than $12.9 million. People with that kind of wealth also know how to start planning early to avoid the tax, so the tax is practically ineffectual. A fairer inheritance tax could go a long way to fixing the worsening wealth gap in America.
Earlier quoted context omitted.
$12.9 is per estate, not per heir. If someone has one spouse and 3 kids and also leaves by will some stuff to 6 other relatives, then the exemption is split between the 10. Each benefits on average from an exemption of $1.3 MM. At the highest tax bracket, they get a one time tax deduction of about half a million. When people talk about wealth gap, they mean the ultra-rich, the multi-millionaires. For someone with a n…
People in the middle class don’t have 20 million, or 10 million.
Meanwhile the estate tax in the US only applies to inheritances larger than $12.9 million. People with that kind of wealth also know how to start planning early to avoid the tax, so the tax is practically ineffectual. A fairer inheritance tax could go a long way to fixing the worsening wealth gap in America.
Another huge loophole is charitable deductions. There's absolutely no reason the government needs to be helping fund individual charity decisions (for anyone, poor or rich). You have billionaires avoiding the majority of taxes they owe by giving money away to their pet charity causes.
It is sort of interesting how Gen X is screwed here. Also the children of Gen X eg under 18s and younger Gen Z today.
In Russia, if you are born in Moscow and inherit a granny's flat¥, it gives you an enormous boost. You are free to choose any occupation and dabble in any kind of weird lifestyles or rent it out and live abroad with very modest effort. Meanwhile, if you did not inherit one and don't work in IT, expect to work hard and spend the majority of earnings on rent/mortgage. This applies nontheless even if all of your ancesto…