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Death, Taxes, Fairness, And A Ponzi Scheme


What about taxing capital gains at a higher rate at death than during life? TPC’s Steve Rosenthal and Robert McClelland argue that President Joe Biden‘s and Senate Finance Committee Chair Ron Wyden‘s proposals to tax unrealized capital gains every year raise serious administrative and legal problems. They recommend a simpler, more effective approach: Tax unrealized gains of the wealthy at a higher rate at death than if assets are sold or given as gifts during life. Their idea would discourage high net worth people from avoiding tax by holding on assets until they die. 

This week on the Hill. The House Ways & Means Oversight Subcommittee holds a hearing on taxpayer fairness at the IRS on Wednesday morning.

Ukraine funding perhaps this week. $40 billion in aid remains stuck in the Senate, blocked by GOP Sen. Rand Paul. But Senate Republican leader Mitch McConnell, who traveled to Ukraine over the weekend, seems anxious to get the bill moving asap.    

A billion-dollar cryptocurrency Ponzi scheme? International tax officials are following over 50 leads to potential cryptocurrency tax crimes. IRS chief of criminal investigations Jim Lee told reporters that “some of these leads… involve individuals with significant non-fungible token (NFT) transactions involving tax fraud or other financial crimes, including a $1 billion Ponzi scheme. That’s billion with a B” affecting the US, United Kingdom, Canada, Australia, and the Netherlands.

Nebraska’s tax collections are beating expectations. The state collected more tax revenue than estimated in April and is well ahead of expectations for its current fiscal year. Net April receipts of $939 million were 66.7 percent above the forecast. Nebraska collected over $5 billion in the fiscal year ending June 30, about 11 percent above its forecast of $4.6 billion.

Minnesota agency error means richest owe more in taxes. The Minnesota legislature changed the standard income tax deduction in 2019, but that change was reflected incorrectly in the paperwork preparers used to file taxes in 2019 and 2020. That means 45,000 of the richest Minnesotans owe $38 million more than they expected.  For example, someone earning $500,000 a year would likely owe an additional $400.

 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at dailydeduction@taxpolicycenter.org.



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