If our new President-elect follows through with his campaign promises, wealthy families may find it easier to accumulate dynastic levels of wealth. A repeal of the estate tax will break down the guard against generational wealth, but Trump wants to still impose a tax on capital gains above $10 million upon the sale of assets. This plan, however, would allow rich inheritors to never pay capital gains if they did not sell their assets, unlike modest inheritors who normally sell or spend what they get. Additionally, as for charitable deductions, contributions of appreciated assets into the decedent or decedent’s relative’s private charity will be disallowed with a cap of $200,000 per couple, limiting the incentive for the rich to be charitable. Further, some speculate that we could be saying goodbye to the gift tax and generation-skipping tax as well, which would have a greater economic impact than the repeal of the estate tax. Trump’s tax proposals will contribute to further concentrations of wealth, carving out the perfect resting spot for dynastic wealth.
See Paul Sullivan, Trump’s Changes to the Tax Codes May Encourage Dynastic Wealth, N.Y. Times, November 11, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) & Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
