Richest U.S. Families Set To Dodge $8.4T Taxes In Next Decades

The richest families in the US are set to dodge trillions of dollars worth of taxes in the coming decades thanks to tax loopholes, Sharon Zhang reported for Truthout on Feb. 4, 2022, citing a report by the Americans for Tax Fairness (ATF).

Photo Insert: Failing to impose estate taxes, gift taxes and generation-skipping tax exemptions is threatening not only the US economy but also the “stability of American democracy."

If lawmakers keep the current maximum estate tax rate of 40 percent, the richest families will dodge roughly $8.4 trillion in taxes over the next 24 years. Between now and 2045, the top 0.5 percent of wealthy families will pass on an estimated $21 trillion to their heirs.

As the report notes, capturing $8.4 trillion in dynastic wealth would allow the government to implement the Build Back Better Act for the next four decades, as the House-passed version of the bill was slated to cost $1.75 trillion over a decade. According to the report, wealth-transfer tax avoidance “has played an outsized role in our return to Gilded Age levels of wealth concentration.”

Failing to impose estate taxes, gift taxes and generation-skipping tax exemptions is threatening not only the US economy but also the “stability of American democracy,” the report says.

Tax loopholes allow families to avoid estate taxes, gift taxes, and wealth transfer taxes. Although Donald Trump and congressional Republicans doubled the estate tax exemption during the first year of Trump’s presidency, Democratic lawmakers didn’t address estate and generational tax loopholes in the tax reform section of the Build Back Better Act.

Under the Trump-implemented rule, which is pegged to inflation, estate values of up to $12 million for individuals and up to $24 million for married couples can be passed on tax-free. This is such a high amount that only 0.1 percent of estates owe the estate tax.

“No justification exists for the failure of policymakers to end this scandal,” it continues. “There is no constituency supporting these enormous tax loopholes except the ultrarich and the wealth-protection industry they employ. They serve no societal purpose.”

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