TAMPA, Fla. (WFLA) — The independent, non-profit investigative newsroom ProPublica is calling out Sen. Rick Scott, accusing him of benefiting from a tax loophole instead of taking action to close it.
Scott is one of the wealthiest senators, and once ran one of the world’s largest health care companies. Right now, Sen. Scott is under fire after a ProPublica investigation found he used a loophole to dodge estate taxes.
The loophole is utilized by more than half of the country’s rich, according to the non-profit newsroom that examined troves of IRS records. To be clear, this is not a partisan issue. ProPublica found both Democrats and Republicans have been exploiting loopholes to avoid paying taxes.
“The estate and gift tax is there in order to tax wealth as it moves from one generation to the next,” law professor Richard Painter, a former chief White House ethics lawyer. “That’s the law, now there are lots and lots of ways around it.”
Here’s how this particular loophole works: Assets are put in a trust assigned to an individual’s heirs. If the value rises, the profits can go to your heirs tax-free. Thus, your kids and grandkids can keep more of your cash.
ProPublica found Sen. Scott used the Grantor Retained Annuity Trusts, or GRATs, from at least 2001 to 2009.
The practice is perfectly legal.
“If we can’t say that it’s illegal, what’s wrong with trying to avoid taxes?” Investigative Reporter Mahsa Saeidi asked.
“For every tax dollar I don’t pay, somebody else has to pay,” Painter explained. “Ask yourself – if you’re a voter for one of these people, how many loopholes do you use? Or do you just add up the numbers, see what the bottom line is, pay the taxes.”
Throughout the day, 8 On Your Side tried to reach Sen. Scott to talk about GRATs. We called his offices in Washington, D.C. and Florida. We emailed multiple members of his staff and even sent messages on social media. Sen. Scott’s office would not confirm receiving our emails.
The senator also declined to give a comment to ProPublica.
Painter says it’s time for this loophole and others to close.
“These loopholes – a lot of them wouldn’t be there if Congress didn’t create them to begin with and Congress now has the power to close them but they don’t want to,” said Painter.
So would Sen. Scott consider closing this loophole? 8 On Your Side is watching his public schedule. Next time he’s in the Tampa Bay area, we’ll be there to ask him in person.