Wealth and Estate Settlement
Two independent obligations: embedded capital gain is settled at each realization event; estate tax is settled at death. The annual Wealth Levy is legally structured as an estimated prepayment of the constitutional Estate Tax.
Annual Wealth Levy (Estate Tax Prepayment)
Calculated as the lesser of: (a) a percentage of net worth—1.0% on >$20M, 1.5% on >$50M, 2.0% on >$100M (capped); or (b) an actuarial amortized estate tax payment, with a floor of one-half the applicable percentage (prevents overpayment by young ultra-wealthy taxpayers). Every dollar paid creates a dollar-for-dollar credit against the final estate tax.
Estate Tax (Final Settlement)
50% on estates >$20M. 60% on estates >$50M. 67% on estates >$200M. Capital gains also realized at death. No step-up in basis (§1014 repealed). Death is a full realization and settlement event.
Valuation Enforcement
The Put Option Check: If a taxpayer disputes a valuation, they automatically grant the government a 90-day call option to buy the asset at their claimed lower price. Undervaluation is self-punishing.
The Sweetheart Rate: A locked rate of 0.8%, valid for 5 years, on hard-to-value assets—available only with full fair market value disclosure within the first two years of implementation. After 5 years, standard rates apply. Creates a one-time flood of previously invisible wealth into the national catalog.
Opacity Penalty: Entities without Beneficial Owner Disclosure: 2.0% flat rate, no estate prepayment credit, no graduated discount.
Dynasty Trust and Inter-Generational Rules
Dynasty trusts face deemed capital gains realization every inter-generational transfer or every 50 years, whichever comes first. Mega-foundations (>$250M) taxed as C-Corps at 28%. Charitable deduction capped at $19,000/yr. Gifts to non-spouse family are realization events. Generational Repatriation: US-person heirs inheriting from a former citizen receive a Generational Tax Basis Statement; a 0.5%/yr Wealth Levy surcharge applies until the undertaxed balance is extinguished.
Farm and Business Continuation
Operating farms and businesses transferred to a qualified heir who continues material participation may pay estate tax over 20 years at the Applicable Federal Rate and defer capital gains for 15 years, after which gains are forgiven and basis resets. Qualification requires 5 of 8 years material participation and 2%+ operating income return. Favorable terms apply to the first $20M in farm/business value.
Scoring Endnote 5: Wealth & Estate Revenue
Affected households (NW >$20M): ~680,000. Source: Federal Reserve SCF, adjusted for undisclosed wealth.
Aggregate taxable net worth above $20M: ~$28T. Wealth Levy at blended 1.3% effective: ~$0.36T/yr.
Estate settlements (annual flow, ~2.5% mortality among elderly wealthy): ~$0.06T/yr.
Total Wealth & Estate revenue: ~$0.42T/yr.
Note: threshold raised from $15M (prior versions) to $20M (per individual, no marriage adjustment). Reduces affected pool by ~15% (~120K households removed). Revenue impact: ~-$0.07T vs. $15M threshold. Rationale: reduces political opposition surface; $15M-$20M tier is most mobile and least attached to Civilization Premium.
⚠ Compliance rate: 85%.
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