This is a tax based on wealth, but isn’t a wealth tax as traditionally understood (that is, a tax computed as a percentage of a taxpayer’s total wealth). This does not mean that there might not be a Constitutional challenge, but perhaps the Administration views that risk as reduced by the modifications as the tax is really an income tax on unrealized gain, not a tax on wealth.Ĭertainly, the headliner of the 2023 Green Book is the billionaire tax. Both aspects are part of what was referred to above as some of the strategic repackaging of the prior tax proposals (and perhaps a reason not to ignore them). The tax is also different than a wealth tax, like those proposed previously, perhaps because the Administration was concerned that a pure wealth tax might not pass a Constitutional challenge. The title of the tax certainly seems to be intended to play well with voters. This all may change the dynamic in planning approaches to be used.įirst, what was proposed is not a tax on Billionaires and is an unusual newfangled type of tax. This change may be exacerbated by proposed changes to depreciation recapture rules for real estate developers. That exit strategy will essentially be eliminated for large property owners. However, these real estate interests may then be exchanged in the future to retain tax deferred growth in these trusts. After the developer dies these low basis real estate assets would be costly to sell. These interests generally cannot qualify for a step-up in income tax basis (the amount on which gain on sale is computed) unless the property interests are swapped back into the estate.
For example, a common planning technique for real estate developers has been to sell real estate entities to a grantor trust to lock in discounted values and shift substantial appreciation outside their estates. While this change would not directly affect estate planning it could have a significant impact on overall planning for real estate developers. That would quash what has been a popular planning technique. This rule has been under attack for years and the Greenbook proposes to cap this benefit at $500,000 per taxpayer. Real estate owners have benefited from the ability to exchange one real estate property for another and to defer any income tax. The point is that these strategic changes might result is some portions of these changes actually getting enacted. While none of that may be true or reasonable, and the so-called billionaires’ tax really applies to people with net worth of $200 million, not the advertised $1 billion, it might sound good to some of the populace. After all those really rich billionaires don’t pay their fair share of tax, live in houses that are too big, and spend money on extravagances like rocket ships. A major piece of the repackaging is the so-called “billionaire tax.” The Administration may be calculating that the public will view taxation of the bad billionaires as a good thing to do. Also, there has been some “repackaging” of the proposals to perhaps make the proposals play better on Main Street. from the life insurance lobby, so that the new proposals have a better shot to get passed.
Patrick’s Day, it is also fun.There have been a number of strategic changes made to the tax proposals which may have been made to address objections, e.g. Thus, below please find 100 green books to enjoy on your St. After all, kids, books are much safer than binge-drinking-as well as being a fun and practical accessory to take along to the parade. And yes, they come in every shade (which I have helpfully identified below using a variety of online sources). Whatever your feelings about this, I know some very good things that come in green year round: books. You may also be exposed to green beer, green milk, green dogs, and even (particularly in New York) the occasional black and green cookie. That means you are likely to see, if you venture outside your home in a city of any size tomorrow, a large number of people wandering around wearing green.
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