Wednesday, June 9, 2010

Billionaire Death Passes Money Tax Free to New Aristcratic Family.

I had to pass along this important exchange of wealth story, tax free, to the Dan Duncan aristocracy. It’s the first billionaire death, and first transfer of wealth tax free, under the new estate tax exemption (good this year only). The argument is this: A wealthy person’s money is taxed once already, so it shouldn’t be taxed again when they leave it to someone. But let’s say the money from your paycheck, which has paid out state and federal taxes, is spent to pay a guy to roof your house. Should the roofer’s money be tax free because that money was already taxed?

A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free. Dan L. Duncan, built a network of natural gas processing plants and pipelines that made him the richest person in Houston, died in late March of a brain hemorrhage at 77.

Had his life ended three months earlier, Mr. Duncan’s riches — Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world — would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher — 55 percent. Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.

55 percent is pretty low when you consider where that tax was many years ago.
The United States enacted an estate tax in 1916, and when John D. Rockefeller, America’s first billionaire, died in 1937, his estate paid 70 percent. Since then, the rates have fluctuated, but this is the first time the tax has been repealed altogether.

1 comment:

  1. I thought much of the money accumulated and coming from stocks and such was never taxed before. And Cheney's Halliburton stock options increased 3000% by 2007. Without the estate tax Cheney's family stands to make in excess of $60 million.