IRS headquarters in Washington.
Chip Somodevilla, Getty Images
Terry Savage Tribune content agency
Have Bill and Melinda Gates decided to get divorced now because of possible changes in tax law? This is the speculation in the wealth management community, with many advisors discussing proposed changes to tax laws with their clients.
The Gates family’s assets are primarily tied up in their foundation and are reported to continue to be managed jointly by the couple. Neither of them worries about spouses’ support as they are reportedly receiving $ 300 million a year in dividends alone! Their sudden breakup, likely following extensive financial planning, is being marked in response to Washington tax proposals. With two separate properties, depending on the plans, lower taxes may apply than with a large one.
Before dismissing this speculation as a problem only for the very wealthy, it is worth revisiting the potential impact tax changes could have on your family, especially if you are a baby boomer about to retire.
Getting the rich to pay their “fair share” of taxes has an appeal that cannot be denied these days. But history says that taxes often only target a few, but quickly include the many inattentive.
When modern federal income tax was introduced in 1913, the highest tax bracket was 7% on all income over $ 500,000 ($ 11 million in today’s dollars), and the lowest tax bracket was 1%.