Thursday, September 12, 2013

How Wal-Mart’s Waltons Maintain Their Billionaire Fortune: Taxes

Zachary Mider
Bloomberg

Visitors to the Crystal Bridges Museum of American Art in Bentonville, Arkansas, leave appreciative notes on a glass wall near the entrance.

“Thanks Alice!” reads one. “Merci Alice Walton, pour la vision!” reads another. 
 
Wal-Mart Stores Inc. (WMT) heiress Alice Walton founded Crystal Bridges in 2011 in a wooded ravine next to her childhood home, supplying dozens of paintings from her personal collection. Bankrolled by more than $1 billion in donations from her family, the museum attests to the Waltons’ generosity and vast wealth. It’s also a monument to their skill at preserving that fortune across generations.

America’s richest family, worth more than $100 billion, has exploited a variety of legal loopholes to avoid the estate tax, according to court records and Internal Revenue Service filings obtained through public-records requests. The Waltons’ example highlights how billionaires deftly bypass a tax intended to make sure that the nation’s wealthiest contribute their share to government rather than perpetuate dynastic wealth, a notion of fairness voiced by supporters of the estate tax like Warren Buffett and William Gates Sr.

Estate and gift taxes raised only about $14 billion last year. That’s about 1 percent of the $1.2 trillion passed down in America each year, mostly by the very rich, former Treasury Secretary Lawrence Summers estimated in a December blog post on Reuters.com. The contrast suggests “our estate tax system is broken,” he wrote.

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