How Billionaire Heirs Avoid Taxes and Undermine Public Goods
In the U.S., the progeny of the wealthiest families are notorious for their lavish spending—take, for example, banking heir Timothy Mellon, who built a full-scale replica of a medieval church on his estate, or Wyatt Koch, whose uncle and aunt are major Republican donors, who launched a T-shirt line that was critically panned as “unimaginably awful.”
A recent study by Americans for Tax Fairness (ATF), released on Thursday, highlights that these “billionaire nepo babies” do more than just squander their inherited riches. They also exploit a “manipulated system” that permits them to transfer wealth across generations with minimal or no taxation, as per the report.
Moreover, these wealthy heirs invest heavily in political campaigns to elect officials who will safeguard their unearned riches and shape economic policies to their advantage, ATF points out.
The report includes profiles of several such individuals, including Samuel Logan from the Scripps media empire; Nicola Peltz-Beckham, daughter of billionaire investor Nelson Peltz; Gabrielle Rubenstein, a beneficiary of a private equity fortune; and Eric Trump, son of the President-elect Donald Trump.
These heirs are among a tiny circle of billionaire families who benefit from tax loopholes, ensuring that a fraction of their vast wealth contributes to the public good.
Over the past decade, at least 90 billionaires have passed away, leaving behind $455 billion in wealth. ATF suggests that “56% of this, totaling $255 billion, likely dodged the capital gains tax due to a specific exemption known as ‘stepped up basis’.”
“Under Trump’s leadership, Congress is enacting laws that favor their benefactors, pushing a $4 trillion boon to the wealthy and major corporations.”
Without these tax loopholes, the existing estate tax could generate sufficient revenue to fund universal childcare, preschool, and paid family leave for U.S. workers, with significant funds to spare, according to the ATF report.
The affluent heirs discussed in the document are among the top donors to the Republican Party, donating hundreds of millions to candidates like Trump to secure further tax reductions.
For instance, Timothy Mellon is highlighted as Trump’s “largest supporter, having donated $140 million to a pro-Trump Political Action Committee in 2024 alone,” the report notes.
An earlier ATF analysis found that just before the end of October, 150 billionaire families had spent approximately $1.9 billion on the 2024 elections.
As found by the Center for American Progress earlier this year, the continuation of tax cuts introduced by Trump in 2017 could cost $4 trillion over the next decade.
“The staggering wealth passed down through old billionaire families goes largely untaxed, while they waste billions on opulent homes, private aircraft, and self-indulgent ventures instead of investing in critical public needs,” stated David Kass, ATF’s executive director. “In 2024, these billionaire families used their vast wealth to break political donation records, helping to ensure a Republican majority. Now, Trump and his congressional allies are repaying those donors by manipulating the system to favor the wealthy and big businesses, all while planning cuts to essential services that average Americans rely on.”
The report urges Congress to adopt “effective, sensible tax reforms that are widely supported by the public,” like the Ultra Millionaire Tax Act proposed this year by Sen. Elizabeth Warren (D-Mass.) and Reps. Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.). This legislation would impose a 2% tax on fortunes between $50 million and $1 billion, and more for wealth above $1 billion, potentially raising $3 trillion over ten years, according to ATF.
The estate tax could be “revitalized to meaningfully promote fairness and equal opportunity” through the For the 99.5% Act introduced in 2023 by Sen. Bernie Sanders (I-Vt.) and Rep. Jimmy Gomez (D-Calif.). This bill would lower the estate tax exemption to $7 million per couple and replace the flat 40% rate with a progressive scale that increases with wealth.
“These tax reforms wouldn’t significantly impact the ultra-rich, but they would lessen the extreme wealth concentration that is damaging to society,” the report clarifies. “Simultaneously, they would generate trillions of dollars that could be used to reduce inequality and enhance the lives of families who can only dream of the security and opportunities that the nation’s wealthiest families take for granted.”
“And should these wealthy families need to slightly tighten their belts to pay their taxes,” the report adds, “they might start by curbing the extravagant spending habits of America’s Billionaire Nepo Babies.”
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An economic reporter, Dax Everly breaks down financial trends and their impact on Americans’ daily lives.