Re:The Inheritance Tax Is Far Too Low
by AnthonyMouse on Wednesday June 24, 2020 @01:28PM
(#23631036)
> At that point the only way to hide the money would be to move it off shore, but then that money would be permanently off shore.
Moving money offshore is how companies avoid income tax. The way families avoid inheritance tax is employment.
Your family has a business. It's worth a hundred million dollars and makes five million dollars a year in profit. The five million dollars is going to be taxable income to somebody anyway, so you pay it to your kids as salary (a tax deduction for the parents/business), and most of the compensation is paid in the form of shares in the business. By the time the parents die the kids already own most or all of the business and what's left is below the threshold for inheritance tax.
There's a reason they say the only people who pay it are the ones who didn't plan ahead.
Moving money offshore is how companies avoid income tax. The way families avoid inheritance tax is employment.
Your family has a business. It's worth a hundred million dollars and makes five million dollars a year in profit. The five million dollars is going to be taxable income to somebody anyway, so you pay it to your kids as salary (a tax deduction for the parents/business), and most of the compensation is paid in the form of shares in the business. By the time the parents die the kids already own most or all of the business and what's left is below the threshold for inheritance tax.
There's a reason they say the only people who pay it are the ones who didn't plan ahead.