Three wealth taxes are estate tax, capital gains tax, and a new concept: a tax on your investments. Regardless of what you call them, they erode your family's wealth. This episode looks at how one state, Washington, has enacted two new wealth taxes at a time when thirty states gave back to taxpayers.(See note below).

Learn how federal and state taxes on wealth work, and how to leverage the exemptions available to avoid unnecessary taxation.

Key Points:

- Twelve states have their own estate tax. Ten do not allow each spouse to claim an individual exemption for a total of two. A credit shelter trust solves this problem and is easy to implement.

- Seven state legislatures have bill proposals to tax wealth. One state hopes to assess a 1% wealth tax on non-qualified investments wherever located in the world.

- Capital gains tax is an income tax but assessed against the value of the property when sold. In this sense, it taxes wealth, reduces your net worth, and leaves less to leave as a legacy.

Resources and links:

Three State Wealth Taxes

Estate Tax Masterclass

Case Study: In November 2022, the Washington Department of Revenue reported a 6% increase in its revenue. It now sits on a $15 billion dollar surplus, the largest in state history. Major General Fund-State (GF-S) revenue collections for the December 11, 2022 – January 10, 2023 collection period came in $87.8 million (3.9%) higher than forecasted in November. Cumulatively, collections are $83.3 million (1.4%) above the forecast.