Viewing MD's ownership of Dell another way:
If MD were to die tomorrow, the US Govt. (under current regulations) would want 55% of his net estate due 9 months after death. Given MDell's overall ownership (family trusts), this would represent about 240 million shares of Dell's stock. Dell's estate would need to sell off 240 million shares of the Dell family stock in order to pay estate taxes due. Estate taxes would equal to around $9.6 billion from this one area alone.
Of course, there are formulations, life insurance, and all kinds of other techniques that are used in order to prevent the greatest shock to Dell shareholders, but, the fact remains that efforts toward planning (should an untimely death occur) must start now.
A great portion of MD's sales, I suspect, are related to planning for estate tax payment and stock conversion.
The Republicans are trying to change these rules in Congress (do completely away with the estate tax); but, so far, the Democrats have not allowed it (Clinton vetoed the bill containing the doing away of the estate tax).
If the estate tax ruling was done away with in this country, you'd witness a lot less insider selling of stock. 55% estate tax of an estate exceeding $1.8 million (husband and wife deduction) is a sin. |
