Imagine you’re entering your junior year of high school, when everything changes. Your parents are employed by a private business, whose owner unexpectedly passes away leaving the company in turmoil. Unfortunately for the company, the owner had not planned for the estate tax so his heirs are left to pay a huge tax. Under the current law, IRS evaluates the private estate after the owner’s death. If the assets total greater than $5 million, the heirs have 6 months to pay 40% on every dollar over the $5 million exemption. It doesn’t take long for a successful business to total over $5 million when you consider land, merchandise, and the equipment. Therefore the heirs must liquidate their assets to pay the IRS, often resulting in the company’s closure.
Now you may be wondering how this applies to you.
As students in high school we rely primarily on our parent’s income. Since your parents could be out of a job your life could be affected. If your parents are unexpectedly let go from their jobs they may have to make significant lifestyle changes. This could impact where you live, where you go to school, and the sports team you are a part of. This could even affect future education and college prospects. As a student athlete, if you change high schools this may reduce or even eliminate your scholarship opportunities. The college prospects for those who aren’t involved in high school athletics could be limited to due to tuition costs.
This doesn’t have to be the story. There is a solution, the ASSET solution.
Private business owners have actually come together and are talking with members of Congress to find a solution. Their solution, ASSET, would not only benefit parents but also high school students. The way ASSET works is that the owner could pay a percentage of his or her income to prepay the estate. If the owner had the opportunity to join ASSET we high school students would not have to worry about lifestyle changes. The owner could have been paying the estate tax as in alternative way so there wouldn’t be a tax at his death. For students, this means we wouldn’t have to fear losing many things or the uncertainty in our future. With the ASSET solution the company would have been able to stay intact and remain employing our parents, who pay our bills.
As we know our generation values new idea, in social media and technology for example. Why not press upon our parents’ generation to try something new in taxes? It could help all of us.