> So I spend 30 minutes to set up an LLC and then transfer my assets to that LLC. Now, I don't hold the assets; I hold a stake in a privately-held company.
Beneficial ownership is a well established concept in law, and this strategy simply would not work. If those assets are easily valued and liquid (stocks or whatever) then the taxes will just end up being passed through as the entity won’t be relevant for tax purposes. Sure you could try to hide assets or offshore them or whatever but you’d be running headlong into outright tax fraud at that point.
You would probably instead see less new public companies, more companies/divisions being sold to various groups under opaque structures and taken private, and a lot more weird borderline legal transactions done between private parties to pretend valuation of private companies or other assets are lower than reality.
> Gold / Picasso appreciates. How do you tax me on that? Do I submit an inventory of everything I own to the government every year? How does the government check - do they get to rifle through my stuff every December?
Yes, of course you would owe taxes on such things assuming they were over whatever exemption limits and such. The government can’t realistically check everyone. They just throw the more obvious offenders in prison when found and keep enough background “random audits” to keep folks scared enough into compliance.
And obviously the government has been making “hiding” such assets harder every year with the ratcheting up of KYC/AML laws. Over time you’d see these requirements for pretty much every major on/offramp for such assets like gold bullion dealers, coin shops, or auctions. A lot already are required to verify your identity and even report transactions. There is no more showing up to a car dealer and paying for a new car with a duffel bag full of cash, much less anonymously. Such a transaction is reported and you’d see this simply expand.
Property taxes exist at least in part because the asset is impossible to hide and more difficult than most to play games with valuation.
> And hey, here's a cool one: if my parent owns a company and puts it in their will that it's mine when they die, is that promise an asset I owe taxes on every year? It's clearly worth something: it's potential money down the line.
Presumably your parents would already be paying the wealth taxes owed on the asset in question. That someone might loan you money against a future inheritance seems immaterial but perhaps I’m missing something here?