Wealth Tax – Constitutional Probably – Good Idea Not So Much
Whatever else a wealth tax accomplished, it would be a significant transfer from the upper-upper class to the upper-middle class. I would think that in some of the larger law and accounting firms, there are already people pitching planning techniques to beat the entirely hypothetical tax.
And if it does pass, the resulting regulations will be of mind-numbing complexity. Just for starters. What do you do about trusts? Do trusts pay the tax themselves with beneficiaries allowed to apportion their unused exemption to the trust? Or is the trust wealth somehow apportioned among the beneficiaries? However it is done, let the games begin.
And then there is valuation. Don’t get me started. And if it is a net wealth tax, what counts as a liability? Think that is easy. Read about partnership taxation.
Dressage Trainer Complains Of Tax Court Mansplaining
Judge Holmes did a holistic analysis of the horse activity and also did the factor by factor analysis that is called goofy by some. He notes that Ms. McMillan had a horse called Goldrush who was retired from competition but still had breeding potential. She had not bred him for quite some time but hoped that things would be better if she sent him to Australia. Unfortunately, he died in 2008. Judge Holmes did not note that Ms. McMillan had Goldrush’s semen frozen, so there was still an afterlife of breeding potential in 2010.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.