HOUSE DEMOCRATS BACK OFF TARGETING BILLIONAIRE TAX SCHEMES AND SWAP IN NEW NICOTINE LEVY – By Sara Sirota, Ryan Grim (The Intercept) / Nov 4 2021
The new legislation sacrifices billions of potential estate tax revenue — and makes it up with vapes and e-cigarettes.
A NEW VERSION of the Build Back Better Act that the House Rules Committee released Wednesday was amended to protect tax avoidance schemes used by the ultrawealthy in their estate planning. The updated legislation made up the revenue lost by going light on those billionaires by expanding tobacco taxes to additional nicotine products, replacing a tax that was highly progressive with one that is highly regressive.
The previous version of the bill had targeted a number of complex schemes the superrich use that involve moving money in and out of trusts in order to pass more wealth down to the next generation without getting hit by the estate tax or gift taxes. The provision sent rich people scrambling. A note from the law firm Goodwin warned clients that the restrictions may wind up as law, emphasizing that the provisions would take effect on or before January 1, 2022, so their clients should act quickly. The note advised in bold text:
If you are considering making gifts in excess of $6.02 million, less the portion of your exemption amounts you have already used, you should consult your tax advisor and consider making those gifts as soon as possible.
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