Estate Tax: Government's income has not increased for 25 years, wealth of the rich has increased four times Jensen Huang, the chief of technology company Nadia, is the richest person in America. His wealth is Rs 10.75 lakh crore. After his death, his heirs will have to pay 40 percent tax of his total wealth to the government. But 61-year-old Huang will save most of his wealth from tax. Other rich people are adopting the same strategies that Huang has adopted to save tax. Blackstone Group's Stephen Schwarzman, Meta's Mark Zuckerberg and other companies including Google, Coinbase, Eli Lilly, Master Card and Advanced Micro Devices have invested billions of rupees elsewhere to save federal estate tax. Trusts, charity foundations and other means are being used to save estate tax.
(news published by infowithngc
The New York Times has gathered information about tax avoidance by reviewing securities and tax return documents. In America, estate tax is levied on the rich. The way Nvidia's Huang is saving, he will save about Rs 67 thousand crore in tax for his family. In America, after the year 2000, the income from tax has increased very little. At the same time, the wealth of rich Americans has increased four times. If the estate tax was imposed in the normal way, it could have generated more than Rs 10 lakh crore in income last year. But only one-fourth of this income has been generated. Professor Jack Bogdan sky at Lewis and Clark Law College says, if you have an army of lawyers who charge a fee of one thousand dollars per hour, then you can avoid estate tax. No MP is interested in stopping this.
With Donald Trump being elected President and the Republican Party having a majority in Parliament, estate tax may be abolished. The IRS's funding has already started to be cut. For many years, Republican leaders have been campaigning to withdraw the estate tax. They call it a penalty for family property, agricultural farms and small businesses. Huang's case sheds light on ways to save estate tax. Nvidia's shares are more than 300 percent bigger after 2022. According to securities filings, in 2012
Huang and his wife had kept 5 lakh 84 thousand shares of Nvidia in a trust. At that time their value was 70 lakh dollars. Today the value of these shares is more than three billion dollars. If these shares are directly given to Huang's heirs, they will have to pay 40 percent tax. But now the tax will be only a few thousand dollars. The Huang couple has invested money in many trusts like Pronator Retained Annuity Trust (Bates) in 2016. There is no tax on them after a certain limit.
(news published by infowithngc)
They save Rs 17 lakh crore in taxes every year
Daniel Hamel, a professor of taxation at New York University, estimates that rich Americans save about Rs 17 lakh crore in estate taxes every year. This is done through trusts and other tricky strategies. The Internal Revenue Service (IRS) has been devastated due to years of budget cuts. In the early 1990s, the agency audited more than twenty percent of estate tax returns. In 2020, it has come down to three percent.
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