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RobinHanson's avatar

Yes, I'm aware of how such taxes work.

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Old Spotted Hog's avatar

The problem isn't the final asset mix; the problem is that the act of selling off the original set of assets would subject the proceeds to capital-gains taxes. The only way around this would be a change in Federal and state tax law to allow such an exchange to take place tax-free. If such a measure were proposed in Congress, I suspect that we'd hear a great deal about special tax breaks for millionaires and the pressing needs of society's most vulnerable members, and we'd wind up with a ceiling on the amount exempt from taxes, so that wards with significant assets would continue to lose heavily.

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