The tax rate cited in the article is 20%. According to current Tax Regs that rate starts at $492,000 income. Below that (44K to 492K) is 15% tax rate. Below $44K is 0.00%, nobody. Nobody lives on 44K So the entire discussion is about high net worth dudes (aka "Family Office") The big problem the IRS has with high net worth dudes is that they hold a lot of stocks for long time. Sometimes pay NO cap gains. Then when the account owner(s) pass away, it gets distributed to heirs - at the valuation on the Date of Death (6 month alternate valuation date allowed) Meaning that for high net worth people a lot of the cap gains were never taxed, at any rate. In other words unless you are worth >$100Million, you have nothing to worry about. ***Not a tax professional here, but have been around this stuff for a while.
Matt Levine's column at Bloomberg has a fascinating discussion about firms that buy up life insurance policies and bundle them into trusts that become securities. And how some older folks are buying new life insurance policies with the intent of immediately selling the policy to an investor... and why this practice may be illegal. https://tinyurl.com/240430bblevine This is a gift link. A Bloomberg subscription is not required. The link expires in seven days.
The way people talk in this thread, you'd think that not only do the super rich evade taxes, but that politicians know about this, and some are even in on the scam with them. What an invalid and totally ridiculous tinfoil hat conspiracy theory...
Politicians are made aware of super rich accounting tricks by anyone who thinks it should either be illegal or made legal, they talk to their accountant who tells them it can be done and, voilà !
This entire discussion describes 3 issues: 1) the Fed gov is totally buried in debt, with little hope for a respite. 2) the top tax bracket has most of the wealth, supplemented by the top sliver of "baby boomers". 3) The distinction between income tax (1040) and Inheritance tax (706) is collapsing. In years (and decades past), tax filers could make a case that various securities were purchased so long ago, records of purchase price were no longer available. But central databases of securities prices have been established decades ago, by the CUSIP Service, created 40+ years ago by S&P. *** The simple thing to do would be for a 706 to charge LTCG rates while the decedent was alive. Then 706 rates (much higher) for the rest. But many lawyers abhor compromise. And the party running everything hasn't had a quiet moment of self reflection in many decades. Maybe not ever once in the 20th Century. I say: "Half a bite of the apple is better than no bite of the apple".