Through a technique invented by a lawyer in New York and a chemical engineer in California, each dollar spent on this insurance can typically eliminate $9 in taxes. Spend $10 million on this insurance, avoid $90 million or more in income, gift, generation-skipping and estate taxes.
"I'm not saying this is the best thing since sliced bread, but it's really good for pushing wealth forward tax free," said Jonathan G. Blattmachr, the New York lawyer who heads the estate tax department at Milbank, Tweed, Hadley & McCloy and who explained the plan in a half-dozen interviews.
The technique is legal, blessed by the I.R.S. in 1996.
posted on July 28, 2002 09:40:21 AM new
Linda_K You may have to copy and paste,
All I get is a sign up page.It may also be my connection,(ethernet).
PS-Your url worked for me on the other thread,Thanks
[ edited by junquemama on Jul 28, 2002 10:08 AM ]
posted on July 28, 2002 10:08:34 AM new
It is even worse than the insurance scam. I was watching Moyer the other night about off shore "banking". Seems the industrialized nations, including the US, along with a host of other countries met and decided to put together a treaty to make these off shore banks report identities and transactions or face severe sanctions.
Well guess what happened. Bush got a visit at the Whitehouse by some banker buddies from Texas and they told him that the treaty would also make US banks report IDs and transactions of their foreign depositors. Bush vetoed moving forward with the treaty. I wonder how much drug money is in US banks ?
So anyway, with the advent of debit cards, a wealthy person can bank off shore hidng huge amounts of income and have access to these funds anywhere in the US via the debit card.
There is class warfare in the US, and the working class is losing that war big time. I hope people wise up at election time.
posted on July 28, 2002 10:19:37 AM new
junquemana - You're welcome, and it's working for me.
Don't feel comfortable posting the whole story....but here's some more of it. [Just for you ]
The several billion dollars of this insurance already sold, much of it in the last 18 months, means that tens of billions of taxes will not flow into federal and state government coffers in the coming decade or so.
In recent months, policies with first-year premiums alone of $4.4 million, $10 million, $15 million, $25 million, $32 million and $40 million have been sold by New York Life Insurance, Massachusetts Mutual Life Insurance and other underwriters, according to insurance agents, accountants and tax lawyers who have worked on these deals.
The technique works this way. An older person — typically someone who does not expect to live long and who has at least $10 million and usually much more — wants to avoid estate taxes, which are 50 percent with such fortunes.
Under tax law, money from a life insurance policy goes at death to heirs tax free. The premium paid on that life insurance is considered a gift to those heirs.
posted on July 28, 2002 10:33:02 AM new
Reamond - Please point me in the right direction so I might read about this. Moyer is on what channel? [Or URL]
There is class warfare in the US, and the working class is losing that war big time.
I agree. But where I have a problem is with all the blame being put on Bush. Did not all these accounting/cooking the books happen under the Clinton administration too? Sure they did. I wouldn't blame him for the corrupt CEOs. [etc] anymore than I blame Bush. This is a democratic political issue that I don't really think a lot of people are buying.
I believe most people can see that a president doesn't control the books of individual corporations. And the fact that the different scandals are coming to light now is a good thing. And we're seeing that Bush is willing to do something about this.
If he weren't....that'd be a whole different ball game to me.
posted on July 28, 2002 10:44:50 AM new
Moyer should be on the PBS site.
The Clinton administration DID try to police this criminal accounting. There were 32 Bills floated during his administration to address these problems and all were shot down by the Republicans, including more money to increase staff at the SEC.
The Republicans dumped all over Clinton for trying to "regulate" businesses with more laws.
Bush's appointee to the SEC made the statement when appointed that we were now going to have a "kinder, gentler" SEC - less strict enforcement of the rules.
The republicans are no more than wolves in sheep's clothing. They play the religious right like a cheap violin, just as they play up false patriotism, when all they are about is raping this country for the wealthy.
posted on July 28, 2002 11:04:44 AM new
Thanks Reamond - I'll check out the PBS site later.
I kind of see this the same way I saw both sides of the isle blaming the other when it came to campaign finances. Each time it came up for a vote, the other side would work so it didn't pass. If the American people were fooled by that, if they couldn't see what was happening [that (IMO) neither side wanted anything changed....then I don't know what to say. But...meanwhile each side blamed the other. That's politics. And I agree the average citizen is the one who gets hurt.
posted on July 28, 2002 12:00:38 PM newAn older person — typically someone who does not expect to live long and who has at least $10 million and usually much more — wants to avoid estate taxes, which are 50 percent with such fortunes.
Taxes were paid on this money when it was made, taxes were paid if it earned any income or interest. This 'older person' made the money and either invested it or saved it. whatever.
why should taxes be paid again when it is inherited to a family member?
Unfortunately, many successful business people lose half everything they worked so hard for. This money shouldn't have an inheritance tax in the first place ~ this is not a 'loophole', it is a way to protect one's wealth for the greedy paws of the irs!
posted on July 28, 2002 12:11:44 PM new
I agree totally.
We've had this debate on here many times. Family farms that have been in families for generations are being forced to be sold because of the inheritance taxes. Those aren't all wealthy folks.
The issue of money being given to heirs of the wealthy not being 'earned' by those heirs just gets some all upset.
posted on July 28, 2002 01:08:01 PM new
junq, there's nothing wrong with your connection - the New York Tmes is a subscription site which linda is evidently too dopey to realize. Sign up, set the cookie, and you'll see it fine.
Bush finally makes a big show of pretend enforcement, they select a couple of fall guys for the coverage, and that's fixing the problem? Hardly. You can't expect a crook to turn in his buddies, after all, now can you? They're just waiting for the fuss to end so that they can continue unfettered as before.
posted on July 28, 2002 01:08:05 PM new
junq, there's nothing wrong with your connection - the New York Tmes is a subscription site which linda is evidently too dopey to realize. Sign up, set the cookie, and you'll see it fine.
Bush finally makes a big show of pretend enforcement, they select a couple of fall guys for the coverage, and that's fixing the problem? Hardly. You can't expect a crook to turn in his buddies, after all, now can you? They're just waiting for the fuss to end so that they can continue unfettered as before.
posted on July 28, 2002 01:32:48 PM new
Well then...I suppose you think Clinton was responsible for the IRS [in 1996] okaying this 'loophole'. After all....he didn't stop it. I doubt it.
posted on July 28, 2002 02:07:42 PM new
What about a trust ? I dont have any details but if you have a large estate and you get onto it early you can have most of it written off to the trust, which goes to NOK tax free.
posted on July 28, 2002 02:20:06 PM new
basic math.
income minus taxes = my money.
earnings on my money minus more taxes (because I invested wisely ) = my money.
I die & give my money to whomever I choose.
why should they have to pay taxes again on after-tax dollars?
This is not a loophole for the rich!!
Uncle Sam has no right to double tax this money in the first place!
posted on July 28, 2002 02:51:40 PM new
KRS,You got to admit it was funny,When
the Father and two sons were arrested from
the Adelphi. Corp. The stock market shot up and stayed at 400 points(pre.9/11 level)
Days following very little movement.So now
Everyone knows there is a way to boost the
stock market,Keep arresting the jackass's.
posted on July 28, 2002 07:56:06 PM new
The inheiritance tax is a Red Herring. Any couple with over $1.2 million in assets can afford a lawyer to pass the wealth along without paying a penny in taxes. $1.2 million per couple can pass without taxes. In any event, if they were smart enough to amass $1.2 million, it is easy enough to see how to pass the wealth along without taxes.
Inheirited wealth is also "unearned" income. To say that it was worked for even by the deceased is generally not true. Most large amounts of wealth are amassed by and through vehicles that pay little or no income taxes, and now will not even be subjected to capital gains taxes.
Working people have no idea how a private corporation or limited liability company can operate to the wealth benefit of an individual with no income ever shown or taxed.
The current reason working class people are currently so averse to income taxes is because we are paying a more dear amount of our income. For some reason we buy into the argument that a person with $20 million in income paying an extra $2-4 million in taxes is more unfair than a couple earning $50 thousand a year paying $2 thousand more in taxes.
Allowing individuals to amass these great fortunes without paying an ordinate amount of taxes is what wrecks an economy.
This excess amount of cash doesn't go to buy cars, furniture, etc.. It is being poured into schemes to increase their tax free wealth or into toys like pro sports teams that add very few high value added jobs to our economy..
If we use tax policy to put more disposable income into the hands of the middle class, they buys cars, furniture, college educations, things on eBay, etc..
A multi-millionaire can only drive so many cars, and use so many houses. If we shift the tax burden onto these wealthy individuals and put more income into the middle class, the economy and jobs will increase. That is what Clinton did. Bush did the opposite and wrecked the economy.
If we shift that $1 million tax burden to a multi millionaire, they won't even miss it as far as their consumption habits. The middle class families that receive the benefit of that burden shift will stimulate the economy 1000 fold compared to what the millionaire could have done with the money.
It is also a big lie that if we tax huge amounts of wealth there is none left over for investments to create more jobs. What a load of crap. Middle class investing can be huge as was demonstrated in the last decade, in fact it was too many middle class investment dollars chasing too few shares of stock that created the bubble.
This country needs to increase the tax burden on the wealthy, including inheiritence taxes.
posted on July 28, 2002 09:59:32 PM new
You're exactly right, reamond, and that was the key to Clinton's economically successful administration, and all of us, including his most ardent detractors, enjoyed the benefit as real dollars in our pockets - so many that we hardly felt the tax. No amount of blather can deny the fact of it as the measure is in the current condition.
Aside that, it's wholly ignorant to go around bleating about farms being sold to pay inheritance tax with notations of the like of "Those aren't all wealthy folks" when the fact of it is that no inheritance tax applies until AFTER a taxable $1.2 million is exempted.
posted on July 28, 2002 10:16:25 PM new
Any couple holding farmland or a business worth more than $1.2 million and hasn't done the estate planning to avoid the inheiritence tax deserves to have their estate taxed at 50%.
The Republicans rolled out a couple whose uncle had left them a business valued at $20 million and they had to pay a 50% tax, which meant they would have to sell the business. So what ? They still won the lottery.
I think the uncle died intestate, and they got the business under law rather than a will.
But here's the thing, had the uncle drew up a will, his attorney would have immediately forwarned the uncle of the tax consequences and planned the estate accordingly.
So what we have are a few eccentric examples of estate taxes and now we are rolling back the entire tax.
What the estate tax causes is the divestment of assets before the owner dies. It also causes the assets to be delivered to youner people before the death or incapacity of the owner and also divestment to charities. This most often leads to modernization and expansion of the business.
This tax red herring is akin to getting rid of the income tax because some people didn't use schedule A.
) = my money.