This is how much America’s 15 richest people might save in estate taxes if the GOP tax bill passes. Enjoy, because you’re paying for it.
1. Bill Gates, $35.6 billion
2. Jeff Bezos, $32.6 billion
3. Warren Buffett, $31.2 billion
4. Mark Zuckerberg, $28.4 billion
5. Larry Ellison, $23.6 billion
6. Charles Koch, $19.4 billion
7. David Koch, $19.4 billion
8. Michael Bloomberg, $18.72 billion
9. Larry Page, $17.84 billion
10. Sergey Brin, $17.36 billion
11. Jim Walton, $15.36 billion
12. S. Robson Walton, $15.32 billion
13. Alice Walton, $15.28 billion
14. Sheldon Adelson, $14.16 billion
15. Steve Ballmer, $13.44 billion
This apparently doesn’t take into account charitable donations, though. For example, Gates and Buffett have pledged the bulk of their personal fortunes to the Gates Foundation, and most billionaires make substantial bequests to foundations and charitable organizations that reduce their estates’ tax liabilities. Which raises this question: Will those charitable contributions dry up if these huge estates are no long taxed?
There’s something else you should know about estate taxes. First, they don’t apply to most people; only estates worth more than $5.5 million (single person) or $11 million (married couple) are taxed. Second, heirs received what’s called, in arcane accounting terminology, a “basis step up.” In practical terms, this means without an estate tax, the unrealized capital gains in an estate will never be taxed.
For example, if Joe Investor buys property worth $100,000 and sells it for $500,000, he has a taxable gain of $400,000. But if he dies and his kids inherit the property, they can sell it for $500,000 with a taxable gain of zero, because their basis is adjusted to current market value when they inherit it. Thus, if the estate tax is repealed, the children of America’s richest people will never pay a penny of taxes on America’s largest fortunes. On the other hand, if you work for wages, you can’t even deduct your bus fare to work. Doesn’t seem quite fair, does it?