There is a way for the Evil Rich to provide for their heirs in a remarkably tax favored, if not tax-free, way—private-placement life insurance, a customizable insurance contract that allows unlimited investments to grow tax-free. The contents would go to the beneficiary(s) on the account creator’s death as a death benefit, and so be free of income taxes at that point, also. These accounts were designed that way explicitly to encourage folks to provide for their dependents. The tradeoff is that the account must be under the control of an independent account trustee of some sort; the account creator cannot have even influence over how his money is invested within that contract. The mechanics of how this works isn’t relevant to this post. The outcome, though, is.

In one relatively extreme case, one Rich Person’s account, set up in this way,

could [could, mind you; the account’s manager may make bad or unlucky investment decisions] one day be worth hundreds of millions of dollars, and he won’t have paid a dime in ordinary-income or capital-gains taxes on their growth. He can take withdrawals or loans against the policy’s cash value but generally doesn’t expect to tap the proceeds. When he dies those will go to beneficiaries income-tax-free in the form of a death benefit.

Enter Progressive-Democrats with their hatred of the wealthy and their jealousy of the wealthy’s success and their demand to confiscate other people’s money, especially that of the so hated rich.

Senator Ron Wyden (D, OR) has introduced legislation that would separate these insurance policies from traditional life insurance, making those earnings and losses taxable to the policyholder as they are earned each year.
“We cannot have a bunch of ultrarich tax dodgers abusing its special tax treatment to set up tax-free hedge funds and shelter mountains of cash[.]”

It’s abuse to follow tax law? And: why can’t we have successful people take advantage of the government’s tax law to take care of their families? Never mind that. The Evil Rich Man cannot be allowed to pass his good luck on to his dependents. He owes Government and must pay the Progressive-Democrat government’s vig.