Congress is paying attention to the strategy employed by the wealthy to avoid taxes, known as “buy, borrow and die,” which is a legal yet controversial practice.
This strategy involves acquiring assets, borrowing against their growth, and passing them on to heirs, resulting in billions of dollars of income with a zero income tax rate. This approach generates hundreds of billions of dollars in non-taxable revenue annually.
- Critics argue that the tax code disproportionately favors the wealthy, allowing them to accumulate wealth without regular tax obligations.
- The IRS code taxes income from a job relatively high and income from investments relatively low.
- Senators say there is a need for bipartisan measures to narrow the tax gap without hindering economic growth.
- Republicans say they want to ensure everyone is paying what they legally owe but point to other targets to tackle fairness, such as repealing electric vehicle tax credits that typically benefit the wealthy.
Sen. Ron Wyden, Oregon Democrat, said he is exploring the best ways to close these loopholes. The challenge lies in figuring out how to value and correctly tax assets that have not been sold.
To read a comprehensive version of this article by Stephen Dinan click HERE
