According to press reports, the very wealthy Bill Daley will be forced to sell a number of assets to comply with federal ethics laws in order to become President Obama’s chief of staff. Lest anyone concern themselves with the unexpected tax burden Mr. Daley will incur, worry not. There is a provision of the Internal Revenue Code, Sec. 1043, that will ease the pain very substantially. It allows those forced to divest assets because of appointment to a high level government job a one-time, tax-free rollover of those assets into a blind trust or some other investment that complies with the ethics laws. I don’t know Mr. Daley’s net worth, but his tax saving will probably be in the seven figures. I imagine that will ease his transition to a position that doesn’t pay very well, according to outgoing White House press secretary Robert Gibbs.
Bruce Bartlett is a columnist for Forbes.com, the online side of Forbes, the nation’s premier financial magazine.
He served for many years in prominent governmental positions including executive director of the Joint Economic Committee of Congress, Deputy Assistant Secretary for economic policy at the U.S. Treasury Department during the George H.W. Bush Administration, and as a senior policy analyst in the White House for Ronald Reagan.
Bruce is the author of seven books, including the New York Times best-selling Impostor: How George W. Bankrupted America and Betrayed the Reagan Legacy, and thousands of articles in national publications including the Wall Street Journal, New York Times, Washington Post, New Republic, Fortune and many others. He appears frequently on CNN, CNBC, C-SPAN and Fox News, and has been a guest on both the Daily Show with Jon Stewart and the Colbert Report.
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