Congress is taking notice of the “buy, borrow and die” strategy used by the wealthy to avoid taxes, a legal yet controversial practice.
This approach involves acquiring assets, borrowing against their growth, and passing them on to heirs, allowing billions in income to have a zero income tax rate. The tactic creates hundreds of billions of dollars in non-taxable revenue annually.
- Critics argue that the tax code disproportionately favors the wealthy, allowing them to accumulate wealth without regular tax obligations.
- The IRS code taxes income from a job relatively high and income from investments relatively low.
- Senators say there is a need for bipartisan measures to narrow the tax gap without hindering economic growth.
- Republicans say they want to make sure everyone is paying what they legally owe but point to other targets to tackle fairness, such as repealing electric vehicle tax credits that typically benefit the wealthy.
Sen. Ron Wyden, Oregon Democrat, said he is exploring the best ways to close the loopholes. The trick is figuring out how to value and correctly tax assets that haven’t been sold.
To read a comprehensive version of this article by Stephen Dinan click HERE
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