Friday, November 20, 2015

Nest Eggs of Autumn, 1965

In the 1950's Chase Manhattan's nest-eggers sailed and skied and hunted. By 1965, as the iconic ad campaign was winding down, guns and yachts gave way to agriculture and animal husbandry.

Monday, November 16, 2015

Lies, Damn Lies and Politicians' Tax Talk

Why do political candidates assume voters are dumber than dirt when it comes to taxes?

Some conservatives promise tax cuts that pay for themselves. Prairie Home Companion saluted them with a little song, sung to the tune of "When You Wish Upon A Star."

Others want to ditch the IRS or reduce the Internal Revenue Code to three pages, never explaining how they'll run the country without tax revenue.

Moderates promise lower tax rates without mentioning their plans to expand the tax base by removing deductions and credits. Their "lower rates" often lead to higher tax payments.

Liberals promise to raise tax rates, but only on the really rich. Can you remember any initiative to "tax the rich" that didn't end up taxing the not so rich as well?

It's enough to make you want to vote for "none of the above."

Wednesday, November 11, 2015

Did Richard Mellon Scaife Waste the Family Fortune?

Should the trustees have allowed Richard Scaife, a Mellon heir, to drain hundreds of millions of Mellon money from a family trust, a fund that otherwise would have enriched his children following his death? His children don't think so. See When Half a Million a Month Isn't Enough.

Court documents included in this Pittsburgh Post-Gazette article show a PNC Bank attorney wrestling with the question of how to rationalize discretionary distributions when a trust beneficiary doesn't seem to need the money. Scaife didn't need to live better; he used the millions to practice philanthropy, fund conservative causes and keep his newspaper afloat.

Readers unfamiliar with the Scaife backstory can read it here, in The Washington Post's extensive 1999 profile.

Wednesday, November 04, 2015

Who Knows What Unicorns Are Worth?

Andrew Ross Sorkin was right about the difficulty of pinning market values on the tech startups known as unicorns. "Millions of Americans own a piece of the hottest private technology companies through their mutual funds," writes Kristen Grind in the WSJ. "But no one knows what those investments are actually worth."

For example, last June 30 various mutual fund managers valued unicorn superstar Uber at prices ranging from over $40 a share to less than $34. As of the same date, a T. Rowe Price fund manager guessed the software startup Cloudera was worth almost twice the price estimated by another fund manager.
 As money that once might have parked in CDs and money market funds continues the desperate search for real returns elsewhere, uncertainty and market turbulence increase. Unicorns are one more reason for investors to seek professional, unbiased assistance.

Wednesday, October 28, 2015

Should the Fed Declare the Party Over?

Is the U.S. economy healthy enough for the Fed to raise short-term interest rates from practically nothing to nearly nothing? The pundits' answers are"Yes," "No," "Maybe," depending on the day of the week.

We raise the question mainly as an excuse to introduce you to the artistic creation above. The art mania isn't limited to works on canvas. Installations such as this are much admired, though difficult to store in a free port, much less hang on the wall.

Created by two Italian artists, Sara Goldschmied and Eleonora Chiari, their post-party scene refers to the corrupt high life of Italy in the 1980s. The artwork made news because a museum cleaning crew swept it up and threw it away.

The work's creators were not amused: "It cannot be possible for an installation to end up in the rubbish bin.”

Tuesday, October 27, 2015

A Canvas Craze?

Delaware Freeport
Art collectors are being replaced by investors. Where collectors might safeguard  prize works by placing them on long-term loan at a museum, tax-averse art investors hide away their masterpieces in free port warehouses. In Switzerland, perhaps. Or right here in the States, in Newark, Delaware.

Wonder what financial historians a century from now will say about our art craze. Will they be able to figure out why investors paid tens of millions of dollars, even hundreds of millions, for products that consisted of no more than a few hundred dollars worth of wood, canvas and pigment?

Maybe they'll call it just another Tulip Mania.

Sunday, October 25, 2015

Brits Can't Necessarily Disinherit Their Kids

The European notion of forced heirship seems to have seeped across the English Channel. Could it eventually spread to this side of the pond?

The Guardian describes a case where an estranged daughter eventually won a share of her mother's estate, aided by a 1975 Inheritance Act designed to protect adult children.

Estranged offspring hate being cut out of their parents' wills, as the Daily Mail illustrates here.

Will disputes continue to increase in the UK. Here, too? 

Wednesday, October 21, 2015

How to Avoid Probate: Leave Connecticut!

Fifty years ago Norman Dacey, a Connecticut financial planner, shook the estate planning world by publishing How to Avoid Probate. Living trusts became the will substitute of choice.

Now the State of Connecticut has struck back, substituting painfully high probate fees for state funding of its probate courts. The "fees," amounting to an estate tax in drag, are levied on the gross taxable estate, not the probate estate.

If the northeast portion of I-95 seems even more crowded than usual, it's probably Connecticut's hedge fund elite, departing for friendlier tax climes.

Tuesday, October 13, 2015

Phishing for Phools

Walked into Barnes and Noble and bought a book. Can't get more retro than that.

The volume is Phishing for Phools, authored by two Nobel-Prize-winning economists, George A. Akerlof and Robert J. Shiller. They want us to take behavioral economics more seriously, though their slim volume is intended to entertain as well as inform.

Because people are easily bemused, confused and enticed, the authors believe, free markets need more rules and regulations to function fairly. They're surely right about the human propensity for irrational economic behavior. Whether manipulation and deception is involved is another question. Playing the slots, the authors' first example of irrationality, comes easily to many people. So does the latest gambling craze, fantasy football.

Phishing for Phools is a sign of the times. (I suspect Senator Elizabeth Warren just found the answer to, "What shall I give everybody for Christmas?") For a preview, see Shiller's op-ed in the NY Times. Harvard's Cass Sunstein offers an extensive review here.

Thursday, October 08, 2015

Philanthropy's Name Game Takes a Hit

"Can you tell me the way to the lecture in Higglestone Center?"
"Yes, sir. Continue down Bubba Burns Hall to Axel Turner Door. Turn the Emma Branson Doorknob and walk through to the Prince Abbadabba Arcade. Follow the Arcade to  the Jim and Patsy Gotrocks Archway. You'll see Higglestone on your right, just beyond the Hugh Networthy Terrace."
The Name Game has gotten out of hand. Donors expect their names on buildings and wings of buildings and floors and rooms and equipment and playing fields and (excuse the expression) you name it.

Worse, old donor names are being replaced by new ones. At New York's Lincoln Center (not yet renamed Trump Center) Avery Fisher Hall just turned into David Geffen Hall.

Now comes a possible road block. A New York Court just ruled that Paul Smith's College may not change its name in order to qualify for a $20 million gift from Joan Weill, wife of Sandy Weill, the retired Citi tycoon.

The college, situated within Adirondack Park, was created more than 75 years ago with a bequest from Phelps Smith. His will required the school to “be forever known” as Paul Smith’s College of Arts and Sciences, in honor of his father.

The Weills, philanthropists par excellence, deserve lasting recognition. However, they already have their names on numerous benefactions. Does the court decision suggest that the Name Game may be reaching its limits? Or will "lasting recognition" become merely temporary?

Paul Smith's College

Wednesday, October 07, 2015

Digital Assistants for the Individual Executor

If you're the executor of your rich uncle's estate, you can hire a trust company to handle much of the drudgery. Executors of smaller estates may find help online. charges $99 a year, EstateExec has a $79 one-time fee. Both encourage the amateur executor to keep good records.

Do you know of other noteworthy sources of online assistance?

Thursday, October 01, 2015

How to Prosper by Living Long: the Tontine

You and a lot of others each invest a set amount in a pooled fund.  The fund pays out, say, 4 percent a year, equally divided among you and your fellow investors. As other investors die off, your payments rise. By the time half have died off, your payment should double. And if you live long enough….

The tontine "might be the iPhone of retirement products,” says Moshe Milevsky, an associate professor of finance at York University in Toronto. Is he on to something?

Earlier post: Bring Back the Tontine.

Wednesday, September 30, 2015

Wealth Management Ads, Fall of ’65

A few ads from the year When Wall Street Was Sitting Pretty.

New England had lots of antique shops five decades ago; visiting them was a popular fall pastime.

In the 1960's, only Merrill Lynch's thundering herd was bigger than Bache and Co.

"To manage capital profitably, someone must know the score…." Where but in Boston would you have found a wealth manager who considered being off key to be a fate worse than death? 

Boston Safe Deposit and Trust, alas, did not survive but was subsumed into what's now BNY/Mellon.

Here's a BNY ad from the fall of '65. Like Merrill Anderson's founder, BNY's agency favored illustrations over photos in ads.

Here's another fall tradition. Last Saturday morning my daughter's neighbor and a couple of friends were working away in the driveway with bushel baskets of apples and a cider press.

Tuesday, September 29, 2015

When Wall Street Was Sitting Pretty

These days Wall Street creates fear and anxiety, as illustrated in The New Yorker cover mentioned here.

Fifty Septembers ago the magazine offered a much prettier picture. Wall Street in the vicinity of The New York Stock Exchange was a symphony of color, superimposed on financial headlines.

At the time the Dow Jones Industrial Average was flirting with 1,000, a lofty height unimaginable back in the Depression. Members of the Greatest Generation who started investing after WWII were doing very well indeed.

The New York Stock Exchange was still a big deal in 1965. To build new business for its member firms the Exchange ran a series of ads. Here's one.

The ad's advice is prudent. Investors should buy stocks only with money they won't need in the foreseeable future, define their goals, study the companies that interest them. And, of course, consult a registered representative at a member firm. 

Today we know The New Yorker cover painted too rosy a picture. The mid-1960's marked the crest of the great postwar investment boom. The Dow wouldn't flirt with 1,000 again until the '80s.

If that 1965 New Yorker cover marked the end of an investment era, might this year's cat-and-mouse cover also herald a turning point? Since the Dot.Com bust of 1999, stock prices have soared, plunged, soared and, lately, plunged again. Plenty of sound and fury, more than enough fear and anxiety, but little or no net progress.

Back in 1999, Warren Buffett forecast that investors might have to wait 17 years for the beginning of another great bull market. That is, until 2016. So cheer up! Maybe we have only one more year of fear and anxiety to go.

Saturday, September 26, 2015

Yale 11.5, Harvad 5.8

For the fiscal year ending June 30, Yale's endowment recorded an 11.5% return, down from the previous year's 20.2% but handily beating Harvard's 5.8% return. (MIT outpaced even Yale, returning 13.2%.)

Hedge funds and private equity (giddy up, you unicorns!) now dominate Yale's portfolio. Because they're favored by Yale's endowment manager, David Swensen, these alternative assets should remain popular with UHNW investors.

Speaking of unicorns, if you're looking for an Advent calendar for a private equity player, The Metropolitan Museum of Art has just the ticket.

Thursday, September 17, 2015

Is “The Girl in the Spider's Web” Still Rich?

Lisbeth Salander, the late Stieg Larsson's invincible heroine, is back, in an estate-sponsored sequel written by David Lagercrantz.

Lisbeth shouldn't have to work for a living, Larsson left her with a net worth of half a billion or so. Is Jeremy MacMillan still running her family office?

Sunday, September 13, 2015

Best Wealth Management Commercial, U.S. Open

Before Federer and Djokovic finish their match, let's declare BNY/Mellon the clear winner for "Best Wealth Management Commercial" during ESPN's TV coverage of the US Open tennis.

BNY/Mellon's "Perlman" reinforces the theme of its print ads: unlike most banks, we actually manage our clients' investments. In the commercial, the violin soloist at a Perlman performance turns out to be the ungifted Rhea, not Itzhak. 

For years and years, we heard that banks were dweebs who ought to outsource the job of choosing investments. The outsources, of course, were no better than the banks. It's fun to see BNY/Mellon strike back.

Tuesday, September 08, 2015

JEB's tax plan: 1987 Redux

In a WSJ op-ed Jeb Bush proposes dropping income tax rates back to 1987 levels. He implies that he would also make hedgies treat their carried interest (their share of the fund's gains) as regular income. And, yes, Jeb would end the taxation of private wealth transfers. No death tax.

How much influence will Jeb's ideas have on the tax reform effort expected in 2017?

Monday, September 07, 2015

Post-Death Facebook Posts

"We're still waiting for real news, like post-death Facebook posts." I complained recently. 

My wait may be over. Eter9, now in beta, will use artificial intelligence to keep me posting for eternity.

The BBC explains here.

Friday, September 04, 2015

Will the Mouse of Wall Street Find More Cheese?

"The stock market is all about fear and anxiety, best shown in how a mouse reacts to a cat." So reasoned Dutch cartoonist Joost Swarte, creator of this week's New Yorker cover,"The Mouse of Wall Street."

Swarte's analysis was incomplete. A Facebook comment offers the necessary addition: "Fear, anxiety and greed."

Can the mouse still expect greed to be rewarded, despite the market correction? The New Yorker's James Surowiecki offers room for hope. Surowiecki points out that the economy looks better than the market. With obvious exceptions like Apple, China's woes shouldn't do significant harm to American companies.

Yale's Robert Shiller sees the mouse in peril. CAPE, the modified p/e ratio he helped to develop, continues to run dangerously high. 
It is entirely plausible that the shaking of investor complacency in recent days will, despite intermittent rebounds, take the market down significantly and within a year or two restore CAPE ratios to historical averages. This would put the S.&P. closer to 1,300 from around 1,900 on Wednesday, and the Dow at 11,000 from around 16,000. They could also fall further; the historical average is not a floor.
What do you think? Will the mouse find more cheese, or will the Dow collapse?

Saturday, August 29, 2015

Wall Street's Best Euphemism

What marketing genius thought of correction as the term for a stock market drop of less than bear-market proportions?

Correction leads investors to look on the bright side and stop worrying. Stock prices went wrong ("Did you really buy Exxon at $100?") but now they're corrected. Aren't you glad?

Old line wealth managers wondered if our latest correction would panic clients of online investment services. Betterment's Dan Egan thought not

“The vast majority of our … customers are normal people going on with their lives. We are not going to be the ones who force our clients to pay attention to the stock market since we know that is not good behavior.”

Nevertheless, Egan took the precaution of posting What to Do After a Market Drop. The contents nicely mirror what non-robotic advisers were telling their clients. 

Your obedient blogger is not on Ric Edelman's email list, but for some reason Ric sent along this revealing chart – a good way to demonstrate that stock prices go up a lot more than they go down. 

Ironic, isn't it? Except in the very short term, the stock prices reset by a correction almost always prove to be pessimistic, and therefore incorrect.

The Trust Officer and the Orphan

This week's fiduciary feel-good story, spanning almost half a century, from Ron Lieber in The New York Times.

Thursday, August 20, 2015

Police Officer Loses Job and Webber Inheritance

The Webber case, involving an elderly woman who was leaving more than $2 million mostly to charities until she met a young police officer, is decided at last. The officer, already fired from the force, loses his inheritance as well.

The court found Aaron Goodwin exerted undue influence over Geraldine Webber, who was in her 90s when she made a new will leaving Goodwin her waterfront home and other assets.

The Portsmouth Herald, our local paper, covered the Webber case like a blanket, spotlighting local attorneys who had refused – or in one case agreed – to draft her new will and questioning the actions or inactions of the police department and its commissioners.

How much of the more than $2 million is left to distribute, under Webber's earlier will, has yet to be reported.

Postscript: Morning paper just arrived. Can't accuse them of downplaying the story.

Wednesday, August 19, 2015

Retirement Investing: Plan B?

"We shall fight on the beaches, we shall fight on the landing grounds…." Oh, wait! That was Winston Churchill in 1940, not opponents of the Labor Department's proposed fiduciary standard for investment advice.  Nevertheless, they showed their fighting spirit at last week's hearings.

Requiring fiduciary-quality advice would not reduce costs, representatives of the investment-products industry contended. They repeated their warning in TV commercials. Workers seeking fiduciary guidance would have to pay up, shelling out the same one percent annually as richer folks. And the industry's fierce resistance ("We shall never surrender!") would send compliance costs through the roof.

Perhaps some sort of fiduciary standard for investment advisers to 401(k) plan investors may yet emerge. But the pale, anemic regulation probably won't be worth much. 

So it's time for Plan B: If sellers of investment products can't be turned into fiduciaries, perhaps they can be sidelined.

Plan B proponents advocate drastic steps to simplify retirement investing. They would replace today's  jungle of retirement plans and accounts with just one vehicle. John N. Friedman calls it the Universal Retirement Savings Account. Investment choices ideally would be limited to low-expense index funds or life-cycle funds. 

Unfortunately, history shows Plan B is a bad bet. Government efforts at simplification almost always fail– look at the Internal Revenue Code. Restricting investment choices to a few simple, inexpensive products is equally difficult. If this is a free country, shouldn't investors be free to buy pricey investment products without interference from the Nanny State?

Anybody got a Plan C?

Monday, August 17, 2015

Needed: Post-Death Media

The British may now make "pre-death" videos (h/t to Gerry Beyer's blog for calling attention to this item). Yes, and generations ago, people wrote pre-death letters. We're still waiting for real news, like post-death Facebook posts.

Friday, August 14, 2015

“America in Circulation” is Worth a Visit

The Museum of American Finance offers an online historical survey consisting of American paper money. Prepare to be amazed by the variety of bills and notes, some dating back to colonial times.

State bank notes often paid tribute to local enterprises. Stonington on the Connecticut shore once thrived as a whaling port.

This legal tender note was issued about a century after the Lewis and Clark expedition.

Sunday, August 09, 2015

Genuine Stock Picks, Fake News . . . or Vice Versa

In The New York Times, Joe Nocera recalls when Jon Stewart, late of The Daily Show, took on Wall Street. Most famously, "the Cramer takedown."

Officially, Jim Cramer was an authentic stock analyst and Jon Stewart hosted a fake news program.  In reality, many a millennial looked to The Daily Show, not the networks, for news, and Cramer himself acknowledged his CNBC role as an entertainer.

Confusing? Not really. As George Burns might have said, "Authenticity - if you can fake that, you've got it made."

Monday, August 03, 2015

Don't Spend the Kids' Inheritance

Milllennials could need all the windfalls they can get. Steve Ratner in his NY Times column shows how 18- to 34- year olds are financially disadvantaged compared to their counterparts in previous generations.  Most of them won't inherit much, but every little bit will  help.

Postscript: Picked up my Monday NY Times this morning and noticed the print edition was light as a
feather. The paper's future resides online, and the transition is already noticeable. For instance, the print version of Ratner's column was accompanied by only one chart. The online version is graphically enriched.
One of the added graphics shows millennials are poorer than their age-group used to be. Another displays a major reason why.

Tuesday, July 28, 2015

Wealth Management, Swiss Style

Finding investment banking profits hard to come by, major Swiss banks are emphasizing the more lucrative business of wealth management, the NY Times reports.

Skill in stock picking is not required, judging from a survey of brokerage accounts at one large Swiss bank. Clients who followed their advisers' advice when buying stocks did worse than those who selected stocks on their own.

U.S. wealth managers who have lost clients to "more sophisticated" Swiss institutions are entitled to smirk.

Monday, July 27, 2015

Divorce Settlement Saves Estate Tax, But . . .

1978: Jimmy Carter was in the White House and an Illinois businessman seems to have been in love, although not with his wife. He divorced her, agreeing in a settlement agreement to leave their three daughters and one son half his estate in equal shares when he died.

He remarried the following year. By the time he made a new will and created a trust he must have forgotten the divorce agreement, for he left the children less than 34% of his estate.

The businessman, Warren Billhartz, died in 2006. The following year his widow must have staged a coup, convincing her stepchildren to waive their rights under the divorce agreement. A federal appeals court summarizes:
According to the Marital Separation Agreement, the four children were to receive 50% of Billhartz’s “estate” (an undefined term), divided evenly. In the end, though, they cumulatively ended up with less than 34% of Billhartz’s assets, divided unevenly. None theless, after receiving notice of this discrepancy, all four children executed an agreement (the “2007 Waiver Agreement”), in which they accepted the lesser shares set out for them in the trust and waived all potential claims they may have been able to assert against either the Estate or the trust. The payments to the children totaled approximately $20 million; each daughter received about $3.5 million, while Ward received $9.5 million.
 How do federal courts enter the story? Even though the divorce agreement was not honored, it was used to claim that $3.5 million per child was a deductible payment of indebtedness rather than an estate-taxable transfer. The IRS objected but ultimately agreed to allow an estate-tax deduction for slightly more than half the payments.

Moneywise, that was good news. Familywise, it was explosive. The children finally realized what they had signed away when they agreed to accept no more than their father had left them by trust.

The daughters and the son went to court seeking their full shares of the estate, and the daughters won an additional $1.45 million each. But that meant the agreement with the IRS no longer looked so good. The children wanted it revised to allow a deduction for at least part of the additional payments. The Tax Court said no, and now the Appeals Court agrees.

Trusts and Estates saves us the trouble of spelling out the details of the story here.

Question for Jim Gust: Did Billhartz hit upon a ploy other wealthy individuals could use to do some estate-tax planning when they shed a spouse?

Thursday, July 23, 2015

Proliferating Trusts . . . Bulletproof Trustees

Thanks to Gerry Beyer for calling attention to Adam Hofri-Winogradow's survey of trusts around the world.

"More than ever before," Hofri states, "the trust is now heavily used across most of the globe as a key means for individual and family wealth planning...."

Unsurprisingly, the survey finds that dynasty trusts, designed to last more than a century if not forever, have surged in popularity. But "forever" may prove theoretical. A significant proportion of such trusts may run no longer than conventional generation-skipping arrangements, thanks to children or grandchildren armed with powers of appointment. 

U.S.-based trusts stand out from the global pack in a couple of ways: Greater emphasis on protecting beneficiaries from creditors, and a greater determination on the part of U.S. grantors to keep a degree of control over what they give away.

Until the last generation or two, generally trust beneficiaries could seek legal relief if they suffered losses due to the trustee's negligence. No longer. When the wealthy create trusts they are routinely expected to accept exculpation clauses that shield trustees from liability.  It appears, Hofri-Winogradow finds, "that exculpatory terms, without settlors receiving any quid-pro-quo for their inclusion, are now a conventional, nearly universal standard in donative trusts serviced by professionals. "

(He has enlarged on the theme of vanishing protections for beneficiaries in The Stripping of the Trust.)

Is legislation desirable to roll back the exculpatory tide? Or should the trend be welcomed if it shields trustees from beneficiaries who expect them to adhere to  the Will Rogers Rule of Investing?

You remember the Rule:

Buy stocks that go up. If they don't go up, don't buy them.

Regular Folks Aren’t Hot For Stocks

The ups and downs of the stock market continue to scare savers, judging by this survey from Bankrate. Not so many years ago, real estate proved scary, too. But people don't hear about the daily price fluctuations as they do with the stock market.

Friday, July 17, 2015

Art as Asset Class: the New Gold?

High-priced artworks used to be collectibles. Now they're a red-hot asset class. Is the booming art market a bubble, inflated by speculators flipping paintings, that's about to burst?

Not necessarily, writes Peter Schjeldahl in The New Yorker. He cites an article by J. J. Charlesworth, a British critic who believes the very rich won't panic. Art is merely one of their alternative assets. a minor fraction of their wealth.

Indeed, today's global billionaires may see art not as a speculation but as the new gold.
[T]he most intriguing motive for the rampage of collecting involves a term unfamiliar to me: “store of value,” having nothing to do with a type of retail outlet. It is about liquidity that is vested rather than invested, and it speaks to dread. Besides being something that people buy when they already own everything else, art shares with gold and diamonds the desideratum (lacked by real estate) of being portable. Charlesworth observes that “alongside global prosperity has come a lot more political instability, and it’s in the interests of the social elite to keep their options open as to where they relocate.
Your van Gogh is thus the equivalent of a packed suitcase kept under the bed against the morning of a telltale noise from the street outside.
Stores of value should be durable, like gold. Today's hot artworks? Maybe not so much. Consider the gilded beer carton.

Budweiser carton gilded by Danh Vo.
The carton was recycled and gilded by Danh Vo, an "early blue chip" artist popular with flippers. His unique artwork got pictured in The New York Times because Vo has a dispute with Bert Krenk, a wealthy Dutch collector. Krenk commissioned Vo to create an installation, perhaps along the lines of this one.  Vo provoked a legal battle by instead offering nothing but the Budweiser carton.

Do you think the corrugated paper box will last long enough to become an icon of our new Gilded Age?

Monday, July 13, 2015

Can Gigantic Family Businesses Avoid Estate Tax?

Some "family businesses" have become humungous. Mars, for instance. Other giant enterprises have sold shares to the public but remain under significant family control, such as Schwab.

At this humungous level, maintaining family ownership or control for another generation may well be socially desirable. Family control counters the short-sightedness typical of businesses that must
please Wall Street analysts. (If Mars Inc. had been a public company for a generation or two, Milky Ways probably would be inedible.)

Estate tax, however, poses a nearly impassable barrier. No wonder, then, that families with humungous businesses fight fiercely to repeal the estate tax. As suggested in this report, their potential tax liabilities are staggering.

Possible alternative: How about borrowing an idea from Paul Newman. Newman's Own, the nearly humungous business the actor founded, devotes its profits to charity. Could we give Mars, Schwab, et al a free pass from estate tax if they agree that 95 percent of profits will be used for the public good?

Saturday, July 04, 2015

Dislike Death Taxes? So Do the Brits

"Inheritance tax is one of Britain's least popular taxes," according to The Economist's Economics blog. "A survey in March by YouGov, a pollster, found that 59% of voters thought the tax unfair, the highest figure for any individual levy."

David Cameron's Conservative government proposes to reduce death-tax pain by exempting the transfer of middle-class homes, effectively raising the total exemption for married couples to about $1.5 million. Compared to an exemption of well over $10 million enjoyed by married couples here in Britain's former colony, that's less than generous. The Economist's blogger, however, seems unsympathetic.