Some people will do almost anything to lower their tax bill – including die.
That’s the third element of an estate planning strategy – “Buy, Borrow, Die” – that was recently the focus of Senate Finance Committee hearings on the efforts of the country’s wealthiest individuals to evade or reduce the amount of taxes they pay.
Sen. Ron Wyden, D-Oregon, gave an example of the strategy at work: “A corporate raider buys a business, and then borrows against its growing untaxed value to fund their extravagant lifestyle. Everything from superyachts to luxurious vacations, expensive art deals – you name it. It goes up and up in value all while not paying a dime in tax. And when they die, their assets are passed to their kids, often entirely tax-free – and the cycle continues.”
Wyden contrasted this with a “nurse or a firefighter who is required to pay taxes out of each paycheck. Working people don’t get to play by the same rules as billionaires. They don’t get to call up an accountant every time they don’t feel like paying taxes.”
The hearing was held to highlight Wyden’s Billionaires Income Tax, the main thrust of which is a tax on unrealized gains, according to Andrew Wilford, senior policy analyst at the National Taxpayers Union Foundation.
