How about, “Yes”?

When a student incorrectly chose the affirmative in one of his impossibly complex yes-or-no hypotheticals, my beloved law professor Bernie Meltzer used to observe wistfully, "There is a shorter, and better, answer." 

I was reminded of this a few weeks ago while reading a hypothetical question-and-answer devised by the editors of the Wall Street Journal to help parents answer the apparently daunting question, "Mommy, are we rich?" 

If they ask: Did dad sell his business for $200 million?

You can say: Dad did sell the company for a lot of money, but taxes will take half of that, we will spend some on education and family needs, and we will give the rest to charity. So that is not all our money.

There is a shorter, and better, answer.

In fact, Federal capital gains taxes will "take" 15% of the part of the sales price that counts as gain–that’s a long way from half.  And unless Dad dies without having made any plans to shield his fortune–in which case a paltry $3.5 million will pass to his wife and children tax-free–very little of that money will ever be subject to the maximum estate tax of 46%. 

Look: if you want to play pansy-ass games with your kids about their location on the economic food chain, be my guest; but at least be consistent with the truth.


Tags: ,

One Response to “How about, “Yes”?”

  1. Stuart Jamieson Says:

    May I respectfully suggest that there is an even shorter answer?

    If the family is pretty much anywhere in the Northern and Western Hemisphere, the answer is one word: YES!

    I don’t have the exact figures in front of me rich now, but in relationship to the rest of the world, we are immensely rich!

    We know where our next meal is coming from, we have a dry place to lay our heads, we make more than one dollar a day…

    This actually happened to us: Our 4th grade daughter asked if we were rich. We simply responded. YES!


Comments are closed.

%d bloggers like this: