But one important feature of the Sanders bill is that it closes down some of the more insidious ways that the wealthy avoid estate taxs. While most attention will be focused on the higher rates and lower exemptions, some of the most meaningful provisions are tucked into the “loophole closing” section. As Sanders told NPR, “At the end of the day, we need massive tax reform in this country, so that we end the tax loopholes and the giveaways that the wealthy and large corporations.”
Over the last two decades, right-wing anti-tax groups failed to abolish the estate tax, though they have come close on several occasions, most recently as part of the 2017 Trump tax cut. They did succeed in raising the exemption so that in 2021, only those with wealth over $11.7 million—or a couple with $23.4 million—are subject to the tax.
Behind the scenes, however, the real attack on the estate tax has taken place in the offices of tax lawyers, accountants and wealth managers who are paid millions to hide trillions of wealth. This “wealth defense industry” serving the super-rich has gotten adept at creating complex tax dodging vehicles, including dynasty trusts, grantor trusts, manipulation of valuations, and other mechanisms so complicated that I’d lose your attention, dear reader (For an accessible primer on this topic, check out my new book, The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions).
What’s important is to understand that these are intentionally intricate and impenetrable. The wealth defense industry thrives on the creation of complex trusts, opaque transactions, and volumes of paperwork that justify their highly paid services. Complexity is their bread and butter.
Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction