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Not true.
Obama was talking about a loophole that allows the wealthy to set up trusts and then plow unrealized capital gains, yet to be taken dividends and deferred income, all without incurring any tax liability at that moment, into the trust. If the trust is then left untouched by the owner it remains technically 'tax deferred', but if the owner dies and the trust becomes part of the estate, it passes to the heirs with no taxes owed. It's a loophole in the inheritance laws, it's not a tax on income which has already been taxed. That's what the normal inheritance tax does and there's already a $5 million ($10 million for couples) exemption in that case, so no poor millionaires are getting wiped out by inheritance taxes. Sorry, but this new proposal is intended to only recover taxes which were NEVER paid in the first place but were technically owed by the original owner of the trust.
OCU |
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