It’s probably not that often that you pore over the US Treasury’s daily reports of financial transactions and come away with anything other than a feeling of intense boredom.
But looking at data from February 28, 2023, associate director of budget analysis at the Penn Wharton Budget Model John Ricco found something intriguing: a payment to the government as “estate and gift” tax to the tune of $7 billion. This is by far the largest estate and gift tax since 2005 by a wide margin, according to Quartz.
Ricco spotted the large payment, noting that that kind of payment would have to be made by one of the top 10 richest Americans.
Based simply on the tax rate on estates of 40 percent, that would mean the estate was worth $17.5 billion. However, through various exemptions and avoidance schemes, it is possible that the estate was worth up to $35 billion.
So what could that payment be? One option is that a billionaire is making “small” gifts now to avoid taxes when they are dead.
“Another possible explanation – the very rich can save taxes by making taxable gifts,” tax law professor Ray Madoff said on Twitter. “Gifts are tax exclusive, meaning the $7 bn was not subject to tax – saving the donor about $3 bn in taxes than he would have paid had he kept it until death.”
It could be a billionaire who has died relatively recently, or one whose estate was slow to be settled. There are a few possibilities on this front, if the settlement has been delayed. But the most intriguing explanation, proposed by Gabriel Zucman of the University of Berkley to Quartz, is that it could be “a very rich person who was missed by Forbes”.
Source Link: An Unknown Multi-Billionaire May Have Been Found Inside US Tax Data