9-12-2013
http://finance.yahoo.com/news/wal-marts-waltons-maintain-billionaire-040100941.html
How Wal-Mart's Waltons Maintain Their Billionaire Fortune: Taxes
America's richest family, worth more than $100 billion, has exploited a variety of legal loopholes to avoid the estate tax, according to court records and Internal Revenue Service filings obtained through public-records requests.
The Waltons' example highlights how billionaires deftly bypass a tax intended to make sure that the nation's wealthiest contribute their share to government rather than perpetuate dynastic wealth, a notion of fairness voiced by supporters of the estate tax like Warren Buffett and William Gates Sr. Estate and gift taxes raised only about $14 billion last year.
That's about 1 percent of the $1.2 trillion passed down in America each year, mostly by the very rich, former Treasury Secretary Lawrence Summers estimated in a December blog post on Reuters.com. The contrast suggests "our estate tax system is broken," he wrote.
Amassing Billions
Spurred by historically low interest rates that magnify the tax savings, the richest Americans have amassed at least $20 billion in trusts like those used by the Waltons. They include Elaine Marshall, the Koch Industries Inc. director, and Fidelity mutual funds' Johnson family.
Closing just two estate tax loopholes -- ones that the Waltons appear to have used -- would raise more than $2 billion annually over the next decade, according to Treasury Department estimates. That doesn't count taxes lost to the type of charitable trusts the Waltons used to fund projects like the museum; the department hasn't estimated that cost.
"The whole tax structure since I came to Congress actually has gotten more and more unfair," said James McDermott, a Washington Democrat who's been in the House since 1989 and has sponsored unsuccessful bills to close estate-tax loopholes.
Guarding the Waltons' wealth as it passes from one generation to the next is the task of a handful of staffers laboring in an unmarked suite in Bentonville, above a bike shop called Phat Tire. Walton Enterprises LLC manages the world's biggest fortune in a nondescript office that even employees of the coffee shop next door have never heard of.
The family's estate-planning efforts are well shielded from public view. The wills of Alice's parents, Sam and Helen, on file in an Arkansas probate court, reveal little about their financial arrangements. That of her brother John, who died in 2005, was sealed by a Wyoming judge.
Dead Proposals
President Obama has repeatedly called for closing the Walton loophole in his annual budget proposal, estimating it would save $3.9 billion over 10 years. So far, the proposals have gotten no traction.
http://finance.yahoo.com/news/wal-marts-waltons-maintain-billionaire-040100941.html
How Wal-Mart's Waltons Maintain Their Billionaire Fortune: Taxes
America's richest family, worth more than $100 billion, has exploited a variety of legal loopholes to avoid the estate tax, according to court records and Internal Revenue Service filings obtained through public-records requests.
The Waltons' example highlights how billionaires deftly bypass a tax intended to make sure that the nation's wealthiest contribute their share to government rather than perpetuate dynastic wealth, a notion of fairness voiced by supporters of the estate tax like Warren Buffett and William Gates Sr. Estate and gift taxes raised only about $14 billion last year.
That's about 1 percent of the $1.2 trillion passed down in America each year, mostly by the very rich, former Treasury Secretary Lawrence Summers estimated in a December blog post on Reuters.com. The contrast suggests "our estate tax system is broken," he wrote.
Amassing Billions
Spurred by historically low interest rates that magnify the tax savings, the richest Americans have amassed at least $20 billion in trusts like those used by the Waltons. They include Elaine Marshall, the Koch Industries Inc. director, and Fidelity mutual funds' Johnson family.
Closing just two estate tax loopholes -- ones that the Waltons appear to have used -- would raise more than $2 billion annually over the next decade, according to Treasury Department estimates. That doesn't count taxes lost to the type of charitable trusts the Waltons used to fund projects like the museum; the department hasn't estimated that cost.
"The whole tax structure since I came to Congress actually has gotten more and more unfair," said James McDermott, a Washington Democrat who's been in the House since 1989 and has sponsored unsuccessful bills to close estate-tax loopholes.
Guarding the Waltons' wealth as it passes from one generation to the next is the task of a handful of staffers laboring in an unmarked suite in Bentonville, above a bike shop called Phat Tire. Walton Enterprises LLC manages the world's biggest fortune in a nondescript office that even employees of the coffee shop next door have never heard of.
The family's estate-planning efforts are well shielded from public view. The wills of Alice's parents, Sam and Helen, on file in an Arkansas probate court, reveal little about their financial arrangements. That of her brother John, who died in 2005, was sealed by a Wyoming judge.
Dead Proposals
President Obama has repeatedly called for closing the Walton loophole in his annual budget proposal, estimating it would save $3.9 billion over 10 years. So far, the proposals have gotten no traction.
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