Typically, when accidents happen to normal people, anything from injuries and banged up cars, to burnt souffles are the more common results. We drop heavy things on our feet, we bump our heads on cabinet doors and sometimes leave the oven on and burn the house down. But imagine now if you and your coworkers made a mistake that cost your organization one-hundred-billion-dollars.
That is exactly what Congress did in their drafting of the most recent and the currently enforced tax codes, when by overlooking one simple means by which a crafty CPA could shuffle money around, they allowed America’s wealthiest citizens, the infamous 1%, to get out of paying $100 billion in estate taxes, since 2000.
The loophole, known as the Walton Grantor Retained Annuity Trust (or GRAT, for short) is an accounting trick, completely legal, which allows the super wealthy to shuffle stock and investment revenues through series of trusts which, when left entitled to their heirs, appears on paper to simply be a matter of the grantor (the one leaving the money,) leaving said money to themselves and that the inheritance itself is actually a tax exempt gift.
As vital services such as TANF, SNAP and now even medicare and social security all find themselves threatened in this age of debt hysteria and austerity, this simple accounting trick has allowed $100 billion to remain firmly beneath the sitting rumps of America’s wealthiest individuals. While career military personnel are being cut from their jobs, while pension guarantees are being thrown out the window for public workers, while the wealthy use bogus charity tax havens to avoid having to contribute their fair share to the public good, their heirs now stand to come into fabulous riches, almost tax-free, after never having worked a day to earn a cent of them.
Tonight, veterans will go to sleep in shelters and on the street. They’ll go without health care, they’ll go without mental health treatments for the prolonged hell of war they’ve gone through in defense of the nation. Tomorrow’s future economic elite? They sleep soundly knowing the (sometimes) billions they have coming in inheritance won’t ever have to pay for any of it. But at least while working America struggles to survive and those in need continue to suffer, they can all rest assured that the pedigreed oligarchs of the future have already been enshrined in the tax code, thanks to Congress.