Category: News

What Actions Can Data-Breach Victims Take?

4 min read

What Actions Can Data-Breach Victims Take?Over the years, millions of individuals have been affected by data breaches, where their sensitive data is accessed by unauthorized cybercriminals or publicly exposed. A data breach can result in huge financial loss if stolen data is used to compromise consumer identity, which also can affect a credit score.

Unfortunately, there is a great number of people who don’t know what to do if affected by a breach. At the same time, there are those in the know who do nothing.

What is a Data Breach?

A data breach is a cyber security incident that exposes sensitive data such as names, contact details, bank details, Social Security numbers, etc.

Data breaches are the work of criminals who aim to obtain specific data. Criminals do this through various methods, including phishing attacks, malware attacks, targeted attacks, vulnerability exploits, and loss or theft of devices. However, data breaches are also a result of technical or human errors. For example, a misconfiguration error exposed the car location data of 2 million Toyota customers in Japan and overseas for 10 years; and the work of an insider led to Tesla’s massive data breach.

Unfortunately, data breach cases keep rising. May 2023 alone saw numerous breaches from different organizations, including healthcare organizations, education institutions, the transportation department, and even tech giants.

For companies, the consequences of data breaches are reputation damage, loss of consumer trust, intellectual property theft, financial loss, and fines due to failure to conform with data protection legislation. While cyber criminals mainly target organizations, individuals also experience identity theft and financial crimes. This especially happens when stolen data is sold on the dark web or publicly published.

What action can data-breach victims take?

Unfortunately, no one is immune from a data breach. However, victims can survive a breach with less disruption. Once a data breach has occurred, the U.S. breach notification law requires businesses or governments to notify those affected immediately after its discovery.

Although companies are responsible for securing customer data in their possession, customers also have a role to play in securing their data. Essential steps to take include:

  • Being aware of any site claiming to be a data breach check site.
    Such sites could ask for personal information or ask a victim to click a link to verify their details. Hackers also take advantage of a breach and pose as the affected company to lure victims into clicking malicious links, primarily through emails. A user must, therefore, first confirm that a breach happened. This can be in the news or on the affected company’s website.
  • Change passwords for accounts exposed.
    In most cases, affected companies will notify victims of their affected accounts, and their security team will provide instructions on how to stay safe. Such instructions include changing passwords on the breached site or any other account that uses similar login credentials.
  • Set up two-factor or multi-factor authentication (2FA/MFA).
    This extra security measure will require a one-time user code to log in to an account in addition to the login and password.
  • Notify the bank.
    If financial-related data is stolen, such as credit card information, the bank must be notified immediately to freeze the cards.
  • Credit freeze.
    Cybercriminals can use stolen data to open new accounts and take loans. To avoid a ruined credit score, individuals can request a credit freeze from major credit bureaus such as Experian, Equifax, and TransUnion.
  • Monitor personal accounts for any unusual transactions.
    Although it depends on the type of data breach and exposed data, victims must look out for unauthorized transactions, including bank account transactions, medical bills, insurance claims, and tax refund claims.
  • File a report with the Federal Trade Commission (FTC).
    If criminals have already used personal data, filing an identity theft report will serve as proof to clear one’s name or dispute a fraudulent transaction.
  • Practice cyber hygiene.
    These are practices that help individuals remain safe online. Aside from account security, consumers must use up-to-date software and operating systems, antivirus software, and avoid publishing too much personal information to minimize online footprints that fraudsters can easily access, such as on social media.

It is worth noting that data breaches are not detected immediately, which means that by the time users get notified, cybercriminals already have had access to the data for some time. And as technology advances, cybercriminals are taking advantage of new technologies, such as generative AI, for phishing attacks. This means that more data breaches may continue to be witnessed.

However, users can help prevent future data breaches by using strong passwords, being cautious of phishing scams, and regularly monitoring financial accounts.

New Personal Finance Provisions in the 2.0 Secure Act

4 min read

2.0 Secure ActThe Continuing Appropriations Act, enacted at the end of 2022, included several provisions that impact retirement plans going forward. Specifically, the legislation enacts SECURE 2.0, an updated version of the Setting Every Community Up for Retirement Enhancement Act of 2019. The following provisions are financial planning considerations that affect individuals.

Increases Catch-up Contributions

Beginning in 2024, catch-up contributions to employer retirement plans made by employees who earn more than $145,000 a year (regularly adjusted for inflation) must be classified as after-tax Roth contributions. This is necessary for eligible plans to retain their tax-favored status.

Starting in 2025, catch-up contributions for participants ages 60 to 63 will increase from $7,500 to $10,000 per year for contributors in most qualified retirement plans. Beginning in 2026, the new catch-up contribution will be indexed to inflation.

Allows Employer Contributions to Roth 401(k)

Employers are now able to make post-tax contributions to a Roth option in an employee’s 401(k) plan. Employers also may open a Roth account option in SIMPLE, and SEP IRA plans for employees.

Expands Emergency Distributions from Retirement Accounts

Starting in 2024, there will be a new exception to the rule for early withdrawals from qualified retirement accounts. Distributions used for unforeseeable events, such as a personal or family emergency, will not be subject to the 10 percent early withdrawal penalty. However, the rule applies to only one distribution per year and only up to $1,000. The plan member has the option to repay the distribution within three years. Absent full repayment, no further emergency withdrawals may occur during those three years.

The provision also waives the withdrawal penalty on any amount for individuals certified by a physician to have a terminal illness.

Increases Age for Required Minimum Distributions (RMD)

Starting in 2023, the age that triggers required minimum distributions (and their requisite income tax liability) from qualified retirement accounts increases from 72 to 73. Starting in 2033, the trigger age raises to 75. The RMD rule apples to 401(k), 403(b) and 457(b) plans). Also, starting in 2024, Roth 401(k) accounts will no longer require RMDs.

Reduces Excise Tax on Noncompliant RMDs

If an investor is required to start taking minimum distributions and does not take out the required amount in a single year, he is subject to a tax on the amount not distributed. The tax used to be 50 percent, but starting in 2023, it was reduced to 25 percent. Moreover, if the account owner corrects the course and takes the full distribution within a certain window of time, the tax may be further reduced to only 10 percent.

Allows Emergency Savings Accounts

Starting in 2024, the legislation permits employers to offer an emergency savings account option within its retirement plan. The following provisions apply:

  • Employee contributions are made with after-tax income
  • There is an annual cap of $2,500
  • Participants may make at least one withdrawal per month
  • Up to four withdrawals per year are not subject to fees
  • Emergency savings may be held in an interest-bearing cash-equivalent account
  • Employers may match contributions, but those must be deposited to the participant’s retirement plan investment, not the emergency savings account.
  • The emergency account is portable when the participant leaves the employer and can be rolled into a Roth-defined contribution plan or IRA

Permits Employer Match for Student Loan Payments

Presently – through 2025 – employers may contribute up to $5,250 (tax-free) a year toward worker student loan payments. Starting next year, employers have the option to classify those loan payments as contributions to the company retirement plan, such as a 401(k). This allows workers with student loans the opportunity to pay down that debt with their own income and still receive an employer match toward their retirement plan – so they don’t have to choose one or the other.

Increasing the Federal Debt Limit, Improving Disaster Resources and Attempting to Reduce Government Waste

3 min read

Increasing the Federal Debt Limit, Improving Disaster Resources and Attempting to Reduce Government WasteLimit, Save, Grow Act of 2023 (HR 2811) – This bill was introduced in the House by Rep. Jodey Arrington (R-TX) on April 26. It would authorize and increase the federal debt limit as well as specific cuts in spending, such as repealed energy tax credits, expanded work requirements for the Supplemental Nutrition Assistance Program (SNAP) and other programs, and nullifies regulations for the cancellation of federal student loan debt. This bill passed in the House on April 26 but was not expected to pass in the Senate.

Pharmacy Benefit Manager Reform Act (S 1339) – Co-sponsored by three Republicans, this bipartisan bill would provide for increased oversight of benefits managers that provide pharmacy management services on behalf of health insurers and employer health plans. The bill was introduced by Sen. Bernie Sanders (D-VT) on April 27. A committee report was ordered and returned on May 11, where it awaits assessment by the full Senate.

Fire Suppression and Response Funding Assurance Act (S 479) – This bill is designed to ensure that pre-deployed state and local fire suppression assets are eligible for FEMA’s Fire Management Assistance Grants (FMAG) in an effort to improve the federal government’s response to wildfire disasters. It would adjust the cost share for fire management assistance to no less than 75 percent of the eligible cost. The bill was introduced on March 14 by Sen. Alex Padilla (D-CA). A committee issued its report on the bill on March 29 and it is currently under consideration in the Senate.

National Weather Service Communications Improvement Act (S 1414) – This bill is designed to improve the instant messaging service used by the National Weather Service, as well as other purposes. The bill was introduced by Sen. Maria Cantwell (D-WA) on May 3; its committee report was returned to the Senate on May 10, where it currently awaits review.

NWR Modernization Act of 2023 (S 1416) – Introduced by Sen. Maria Cantwell (D-WA) on May 3, this bill would authorize upgrading and modernizing the National Oceanic and Atmospheric Administration Weather Radio All Hazards Network. The Senate committee issued its report to the Senate on May 10, where it currently awaits review.

A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Environmental Protection Agency relating to “Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards” (SJ 11) – This joint resolution nullifies the Environmental Protection Agency rule that pertains to the control of air pollution by new motor vehicles. The current rule sets high emission standards for heavy-duty engines and vehicles in order to reduce air pollution. The bill was introduced by Sen. Deb Fisher (R-NE) on Feb. 9 and passed in the Senate on April 26. It is currently awaiting review in the House.

Identifying and Eliminating Wasteful Programs Act (S 666) – Introduced on March 7 by Sen. Margaret Hassan (D-NH), this bill would require the Chief Operating Officer of each federal agency to compile a list of unnecessary programs. The assigned committee issued its report on March 29; it is currently awaiting review in the Senate.

Federal Agency Performance Act of 2023 (S 709) – This Act also is designed to improve performance and accountability within the Federal Government. It was introduced by Sen. Gary Peters (D-MI) on March 8. The assigned committee issued its report for this bill on March 29; it is also awaiting review in the Senate.

Upholding Human Agency in an Era of Evolving Digital Systems

4 min read

AI and Human AgencyTechnology has greatly contributed to improving and streamlining everyday life. However, as technology advances, there is an increased reliance on digital tools powered by artificial intelligence and machine learning. Unfortunately, these technologies are also challenging the fundamental notion of human agency. As a result, there are rising concerns about humans losing the ability to make independent decisions.

What is Human Agency?

Human agency refers to the capacity of individuals to act intentionally and make choices that shape their lives. Although the human agency is influenced by various factors, including social, cultural, and environmental contexts, individuals should maintain the ability to exert some degree of control and influence over their lives. As far as technology is concerned, individuals must retain control and decision-making power. This calls for technologies that support humans in making informed decisions rather than controlling the decisions made.

Concerns Over the Effects of Digital Systems on Human Agency

The Pew Research Center and Elon University’s Imagining the Internet Center conducted a nonscientific canvassing to gather expert views about the future of the human agency.

The experts were specifically asked, “By 2035, will smart machines, bots, and systems powered by artificial intelligence be designed to allow humans to easily be in control of most tech-aided decision-making that is relevant to their lives?”

Of the 540 experts from different fields, 56 percent disagreed with the statement, while 44 percent agreed. Some of the main themes raised by the experts who disagreed with the statement include:

  • The agendas of commercial interests and governments will determine the future.
  • The convenience that comes with automation makes users less vigilant over technology.
  • AI technology’s complexity and rapid evolution can be overwhelming, making it difficult for users to assert their agency.

Common themes raised by participants that agreed with the statement include:

  • Humans also will evolve with technology, and there is the expectation that AI and tech companies will be regulated.
  • Expectations that businesses will protect the human agency to retain public trust and to keep ahead of the competition.
  • Technology will allow varying degrees of human agency.

Key Considerations for Upholding Human Agency

Seeing that technology will keep advancing and more automated systems will be witnessed, it’s crucial to implement ways to help uphold human agency. Some considerations include the following:

  1. Implement mechanisms that contest AI systems. An AI system is as good as the information fed to it. Therefore, it can be faulty or deliberately flawed, and there should be ways to request redress. This can be through AI policies that allow users to contest or rectify a decision made by AI systems.
  2. Empower users through systems that include meaningful choices and controls, enabling users to decide how to interact with them. For example, a system should allow users to adjust preferences, customize settings and choose the features they want. This promotes a sense of ownership and autonomy over digital experiences.
  3. Promote digital literacy and education to teach about technology capabilities and limitations. Technology users must develop critical thinking skills to exercise human agency and make informed decisions.
  4. Integrate ethical principles into technology design and deployment. This can be done by creating guiding ethical frameworks that consider the likely societal impacts and consequences of digital systems.
  5. Guarantee transparency and explainability in technologies and algorithms, providing users with accessible explanations of how decisions are made and what data is utilized. This transparency fosters trust in the technology and empowers individuals to make informed choices.
  6. Establish accountability for the design, development, and implementation of digital systems. Holding individuals and organizations accountable for the impact of their technology helps maintain human agency and promotes ethical behavior.
  7. Implement robust measures to safeguard individuals’ privacy and protect their data. This includes incorporating strong data protection mechanisms, giving users control over their personal information, and establishing clear consent mechanisms for data collection and usage, accompanied by transparent policies. Respecting privacy rights is paramount for preserving human agency in the digital realm.

Conclusion

The essence of being human lies in exercising control over the nature and quality of an individual’s life. However, technological advances such as artificial intelligence are raising concerns about this human ability. Humans are responsible for actively embracing and comprehending the possibilities and implications of living in a world where digital systems take over various tasks and processes. Instead of surrendering their agency, humans should view partnering with these digital systems as a means to supplement and strengthen their intelligence rather than surrendering it.

How To Recession-Proof Your Portfolio (Just in Case)

4 min read

How To Recession-Proof Your PortfolioSome economists and market analysts have been predicting a U.S. recession ever since last fall. They’ve been wrong before – but they’ve also been right. Rather than try to predict how the stock market will react during the next recession, investors are better off planning for a range of potential outcomes. This will help reduce the risk of losses regardless of whether or not the United States experiences a recession in 2023.

Bear in mind that stock and bond markets are forward-looking and typically priced to take into account economic conditions such as higher interest rates, inflation, and commodity prices. In response to whatever factors are in hand, the market adjusts in ways to try to keep returns on par with historical norms and practices.

In its market perspective for 2023, Merrill Lynch suggested that the economic cycle would bottom out, market returns would begin turning a corner, and investors who hold diversified portfolios would see less volatility and be positioned to fully participate in a renewed bull market.

There are several strategies you can implement to help mitigate the impact of an impending recession. Be aware, too, that these strategies are sound all-weather moves designed to help reduce your risk and maximize returns over the long term, regardless of economic and market conditions.

Diversify Your Portfolio

The recent failure of established regional banks is a reminder that there are no “safe” stocks – all stock market investing is subject to a wide range of risks. However, investors should be most wary of owning a high concentration in any single stock. After all, while it is unlikely the stock market will ever be reduced to zero, it is entirely possible for an individual stock to lose total value. This can happen due to a fall in demand, bankruptcy, corruption/embezzlement, a natural disaster, or a public relations scandal. There are many situations that are unforeseen and out of an investor’s control that can lead to substantial losses.

By diversifying your portfolio across a large number of stocks, even those within the same industry (such as competing banks), you can mitigate exposure to a single stock that experiences a major decline in performance. For 2023, Merrill Lynch recommended a broad global stock portfolio with a slight overweight in U.S. equities, including large-cap value stocks and a mixture of small-cap growth and value stocks. It contends that the Energy, Financials, Healthcare, Utilities, and Real Estate sectors offer stable returns via strong cash flow and attractive valuations.

Well-established dividend stocks pay out a steady income as well as offer growth opportunities, which is a good hedge for a strong long-term total return regardless of economic conditions.

Merrill Lynch also favors global fixed-income securities, including investment-grade corporates, 10-year Treasury bonds, and longer-maturity municipal bonds.

Fund Investing

An easy way to diversify across a wide range of stocks and/or bonds is to invest in asset category-specific mutual funds or exchange-traded funds. The immense universe of funds offers a broad range of stocks (e.g., growth, value, large-, medium- and small-cap) and bond (high yield, high quality, government, corporate) fund options. A balanced fund offers a combination of both stock and bond securities to help capture growth as well as capital preservation.

If you invest regularly through a 401(k) plan at work or defer income to an IRA, note that your money will purchase more shares when prices drop, which is often the case during a recession. As long as you have vetted and have faith in your investment choices, this discounted buying opportunity can set up your portfolio for stronger gains once the market recovers.

Cash Allocation

It is always a good idea – even more so during a recession – to hold an allocation in cash or cash-equivalent vehicles such as CDs and money market funds. However, it is not a good idea to sell stocks that have lost ground just to beef up your cash allocation. It may be better to sell a stock with significant appreciation instead, especially if it is in an industry that does not tend to perform well during a recession (e.g., Construction, Manufacturing, Retail, Leisure, and Hospitality).

Shoring Up Services for Veterans, Energy Production and Cybersecurity Risks

3 min read

Shoring Up Services for Veterans, Energy Production and Cybersecurity RisksRelating to a national emergency declared by the President on March 13, 2020 (HJ Res 7) – On March 13, 2020, then-President Trump declared a national emergency relating to the COVID-19 pandemic. Since then, emergency status has continued until the passage of this resolution. The national emergency status relaxed many healthcare rules, such as training mandates for nursing home aides, easier access to certain prescribed medications (e.g., Adderall, Ritalin, oxycodone, buprenorphine), and utilization of uncredentialed nurse practitioners and physician assistants for hospitalized Medicare patients. The resolution to end emergency status passed in the House on Feb. 1 and Senate on March 29. The resolution was introduced by Rep. Paul Gosar (R-AZ) on Jan. 9 and enacted by President Biden on April 10.

Wounded Warrior Access Act (HR 1226) – This bill requires the Department of Veterans Affairs (VA) to respond to online requests by claimants for records related to VA claims and benefits. The VA must notify a requester within 10 days that their request has been received and fulfill the request within 120 days. The bill was introduced by Rep. Pete Aguilar (D-CA) on Feb. 28 and passed in the House on March 7. It currently resides in the Senate.

Veterans’ COLA Act of 2023 (S 777) – Effective Dec. 1, 2023, this bipartisan bill would increase the rates of compensation for veterans with service-connected disabilities as well as dependency and indemnity compensation for the survivors of certain disabled veterans. The bill was introduced on March 14 by Sen. Jon Tester (D-MT). It passed in the Senate on March 30 and is currently under consideration in the House.

Understanding Cybersecurity of Mobile Networks Act (HR 1123) – Introduced by Rep. Anna Ashoo (D-CA) on Feb. 21, this bill would require the National Telecommunications and Information Administration to report on the cybersecurity vulnerability of mobile service networks and mobile devices to cyberattacks and surveillance by adversaries. The bill was passed unanimously in the House on March 7; its fate currently resides in the Senate.

Lower Energy Costs Act (HR 1) – This bill is designed to reduce energy costs by increasing American energy production, exports, infrastructure, and critical minerals processing by implementing transparency, accountability, and permitting rules as well as improving water quality certification and expediting energy projects. The bill was introduced by Rep. Steve Scalise (R-LA) on Jan. 26 and passed in the House on March 30. It is currently awaiting review in the Senate.

SECURE Notarization Act of 2023 (HR 1059) – This bipartisan legislation was introduced in the House by Rep. Kelly Armstrong (R-ND) on Feb. 17. It would permit notaries public to notarize electronic records and perform notarizations for remotely located individuals. The bill provides technical requirements, including creating and retaining video and audio recordings to conduct the transaction. Additionally, the bill would require all U.S. courts and states to recognize in-person and remoted notarizations affecting interstate commerce. The bill also allows a notary public to remotely notarize electronic records involving an individual located outside of the United States, subject to certain requirements. The bill passed in the House on Feb. 27 and is currently under consideration in the Senate.

What Is Web 3.0? Understanding The Next Generation of the Internet

4 min read

What Is Web 3.0? The internet keeps evolving. It started with static web pages in Web 1.0 before evolving to interactive and dynamic content in Web 2.0. A new phase of technology is now introducing Web 3.0, or the third generation of The World Wide Web. Although it is a work in progress, it is necessary to understand the new concept and how it will impact the future of online interactions.

What is Web 3.0?

Web 3.0 is a term used to describe the next generation of the internet. Industry experts consider it the next big thing in the evolution of the The Web after Web 2.0. Web 2.0 refers to the Internet era characterized by user-generated content, social networking, and interactive web applications; it is known mainly as the Internet of Information.

Web 3.0, on the other hand, is built on top of the existing infrastructure; however, it introduces new technologies that enable computers to interpret data in a more human-centered manner. It combines disruptive technologies such as blockchain, augmented reality, virtual reality, edge computing, IoT, etc. As a result, the internet will become a more intelligent and efficient tool for finding and processing information.

Web 3.0 is also referred to as the semantic web or decentralized web and aims to create a more meaningful online experience by integrating artificial intelligence (AI), decentralized networks, and semantic understanding.

Key Features of Web 3.0

Decentralization

Web 3.0 makes good the move toward decentralization. Decentralization implies that instead of relying on central authorities, data is simultaneously stored in multiple locations. Since Web 3.0 is built on decentralized networks, such as blockchain technology, it creates a more transparent, secure, and trusted web and gives users more control over their data.

Artificial Intelligence and Machine Learning

Web 3.0 will enable computers to comprehend information similar to the way humans do, using semantic web concepts and natural language processing. It also will utilize machine learning – technology that employs data and algorithms to imitate human learning and enhance accuracy. Web 3.0 is designed to leverage the power of artificial intelligence (AI), making web applications more intelligent and enhancing their capacity to make informed decisions. It also helps automate tasks, improve efficiency, and provide more personalized experiences for users.

Ubiquity and Connectivity

The rise of the Internet of Things (IoT) is another contributing factor, enabling information and content to be more connected and ubiquitous. It also means data is accessible via multiple applications and devices.

3D Visualization

Using augmented reality, virtual reality, and mixed reality combined with technologies such as IoT makes it possible to create a spatial web. This helps maintain real-life scale and experience on the web. A good example is the application of VR technology in e-commerce.

Openness and Accessibility

Web 3.0 is built on open standards and protocols, which make it more accessible to both developers and users. This promotes innovation and collaboration across different sectors and communities.

The Impact of Web 3.0 and Challenges

Web 3.0 will significantly change how users interact with information online and transform different aspects of life, including commerce, health, and education, among others. For instance, decentralization gives users greater control over their personal data. This might help limit the collection of data without user consent or compensation.

With blockchain technology as a foundation of Web 3.0, the data becomes immutable, transparent, and hard to hack. This is because all transactions will use self-executing smart contracts.

Web 3.0 will usher in a new era of automation as intelligent systems and algorithms become increasingly integrated into online experiences. This will include more intelligent chatbots, personalized recommendations, sophisticated predictive analytics, and autonomous systems.

As a result, there will be an improved user experience. Users will have a more personalized and interactive experience online, with applications that can better understand their needs and preferences.

Despite the impressive positive impact, Web 3.0 is still in its early emerging stage and is not without challenges. As more significant work and effort are being put toward its actualization, several issues must be addressed. First, to facilitate specific user functions, additional layers must be built on top of the blockchain to ease its complex operations.

Secondly, decentralization introduces data governance and regulation concerns. With no central control of data, bad actors can take advantage to promote hate speech, misinformation and cybercrime.

Thirdly, this new iteration of the internet also requires implementing new technologies and using advanced devices.

Conclusion

The evolution of the internet is inevitable. Although more effort is still required to realize the full potential of Web 3.0, business leaders should be aware of new developments to ensure they can take advantage of opportunities presented by the spatial web and venture into new avenues to remain competitive.

Estate Taxes vs. Inheritance Taxes: Understanding the Differences

4 min read

Estate Taxes vs. Inheritance TaxesEstate and inheritance (“death”) taxes are levied on the transfer of property at death. The difference between an estate tax and an inheritance tax is based on who pays the bill. An estate tax is levied on the estate of the deceased, while an inheritance tax is levied on the heirs of the deceased. That’s the simple explanation. As for execution, there are far more nuances based on the monetary value of a bequest; the status of the beneficiary/(ies); and where you live when you pass away.

Federal Estate Tax

An estate tax applies to the value of the assets left behind by a decedent and is paid out from the proceeds of the estate before the rest of the assets are distributed to heirs. Estate wealth is usually comprised of cash, securities, and real estate.

In 2023, if an estate is valued at more than $12.92 million ($25.84 million for couples), the estate will owe a progressive tax rate levied on the value above that amount. For example, if an estate is valued at $15 million, it will pay estate taxes on the $2,080,000 above the exemption. The federal tax rate ranges from 18 percent to 40 percent, depending on the taxable value of the estate.

Generally, the estate tax applies to only the wealthiest 2 percent of Americans, and only 0.07 percent of estates end up paying the tax, according to the Tax Policy Center. Note that assets inherited by a spouse or charitable organizations are generally not subject to an estate tax.

Some states also levy an estate tax based on the location of the property. Presently, 12 states plus the District of Columbia levy an estate tax:

  • Connecticut
  • District of Columbia
  • Hawaii
  • Illinois
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • New York
  • Oregon
  • Rhode Island
  • Vermont
  • Washington

Estate Tax Strategies

To minimize or eliminate estate taxes, the estate owner has several options. Among the more sophisticated are structuring an Irrevocable Life Insurance Trust, a Family Limited Partnership or funding a Qualified Personal Residence Trust. However, the easiest way to legally avoid estate taxes is to give assets away before you die. Estate owners can make tax-deductible contributions to charitable organizations or gift up to $17,000 in 2023 ($16,000 in 2022) a year, per person, to as many people as you want.

Inheritance Tax

An inheritance tax, on the other hand, is a state tax paid by the beneficiary (heir) of an estate. Not every state levies an inheritance tax, and the laws vary considerably by state. The tax is based on the relationship of the beneficiary to the decedent. For example, in some instances, a beneficiary who is a surviving spouse, parent, child or grandchild may be exempt from the tax, whereas a brother, sister, niece or nephew may be subject to an inheritance tax.

Presently, six states levy an inheritance tax (only Maryland levies both estate and inheritance taxes). Each state sets its own exclusion amount, ranging from $1 million to $9.1 million. Amounts above the state exclusion are then subject to a separate estate tax, which tends to range between 1 percent and 18 percent. The tax applies to decedents who lived in one of these states:

  • Iowa (phasing out tax by 2025)
  • Kentucky
  • Maryland
  • Nebraska
  • New Jersey
  • Pennsylvania

Inheritance Tax Strategies

Similar to estate tax strategies, an estate owner can minimize state inheritance taxes by transferring assets to a trust or family limited partnership or by gifting assets. Be aware that assets owned under a Roth IRA or Roth 401(k) – that has been open for at least five years – are not subject to any taxes since contributions were already taxed and earnings grow tax-free. You also might consider using a portion of your assets to purchase life insurance, naming your heirs as beneficiaries. Since life insurance proceeds are not taxable, this is a way to remove money from the estate to create a larger, tax-free inheritance.

As for current estate assets, one surefire way to legally avoid inheritance taxes is to move to a state that doesn’t levy them.

Transparency for the Coronavirus, Federal Settlements, Smart Appliances and Public Education

4 min read

Transparency for the Coronavirus, Federal Settlements, Smart Appliances and Public EducationCOVID-19 Origin Act of 2023 (S 619) – This bill would authorize the Office of the Director of National Intelligence (ODNI) to declassify all information relating to the origin of COVID-19 and any correlation with the Wuhan Institute of Virology. The ODNI would be required to redact the report as necessary to protect sources and methods and then submit it to Congress. The bill was introduced on March 1 by Sen. Josh Hawley (R-MO). It passed the Senate on the same day and the House on March 10. It is currently awaiting signature by the president.

Disapproving the action of the District of Columbia Council in approving the Revised Criminal Code Act of 2022 (HJ Res 26) – This resolution nullifies the Revised Criminal Code Act of 2022, which had previously been enacted by the Council of the District of Columbia (DC). The bill modified DC criminal laws by altering sentencing guidelines, reducing maximum penalties, and expanding the right to a jury trial for certain misdemeanor crimes. The resolution was introduced by Rep. Andrew Clyde (R-GA) on Feb. 2. It passed in the House and Senate on March 8 and was enacted by the president on March 20.

Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Department of Labor relating to “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” (HJ Res 30) – This resolution was introduced by Rep. Andy Barr (R-KY) on Feb. 7. In December 2022, the Department of Labor established a rule that the fiduciaries of employer-sponsored retirement and other investment benefit plans might take into account environmental, social and governance (ESG) factors of companies where they choose to invest shareholder funds, as well as voting on shareholder resolutions and board nominations. This joint resolution, which was passed in both the House and the Senate on March 1, would nullify that rule. The bill was vetoed by President Biden on March 20.

Settlement Agreement Information Database Act (HR 300) – Introduced by Rep. Judy Chu (D-CA) on Jan. 20, this bipartisan bill would require agencies to submit information related to any settlement or consent decree associated with a violation of civil or criminal law. This includes settlements with individual employees who appeal adverse personnel actions such as firings and suspensions or federal settlement agreements negotiated behind closed doors as a result of enforcement actions. The Office of Management and Budget would be responsible for reviewing and archiving all agreements, as well as determining when confidentiality is necessary to protect the public interest of the United States. The bill was passed unanimously in the House on Jan. 25. Its fate currently resides in the Senate.

Fighting Post-Traumatic Stress Disorder Act of 2023 (S 645) – This bill would require the Attorney General to devise a program for making treatment for post-traumatic stress disorder and acute stress disorder available to public safety officers. The bill was introduced on March 2 by Sen. Chuck Grassley (R-IO). It passed in the Senate on March 2 and is currently under consideration in the House.

Informing Consumers about Smart Devices Act (HR 538) – The passage of this bill would require manufacturers of internet-connected devices, such as smart appliances, which include a camera or microphone, to disclose this fact to consumers. The bill does not apply to devices that a consumer would reasonably expect to include these features (e.g., mobile phones, laptops). The bill was introduced by Rep. John Curtis (R-UT) on Jan. 26 and passed in the House on Feb. 27. It is currently awaiting review in the Senate.

Sunshine Protection Act of 2023 (S 582) – This bipartisan bill would make daylight savings time permanent. It was introduced on March 1 by Sen. Marco Rubio (R-FL) but has yet to be assigned to a committee for review.

Parents Bill of Rights Act (HR 5) – This legislation was introduced in the House by Rep. Julie Letlow (R-LA) on March 1 with 122 Republican co-sponsors. It would require public schools to allow parents to review certain materials and resources (e.g., the curriculum, library books, teachers’ materials used in the classroom) and be informed/grant consent for certain school activities (e.g., school budgets, use of technology in the classroom, attendance for guest speakers in the classroom, mental health treatment, gifted and talented programs). The House Committee on Education and the Workforce have issued a report on the bill, but it has yet to be presented for a vote by House members.

The Importance of Global Collaboration in Regulating Emerging Technologies

4 min read

Regulating AIEmerging technologies, such as artificial intelligence, machine learning, data analytics, and biotechnology, greatly transform society and reshape the global economy. However, these technologies also come with a significant challenge regarding ethical and social implications. Global collaboration by governments, regulators, and industry leaders can help ensure that emerging technologies are developed and deployed responsibly.

Challenges of Regulating Emerging Technologies

Emerging technologies have led to complex situations that traditional governments might find difficult to manage. For instance, today’s advanced technologies also come with new forms of crime. This requires law enforcement and public safety organizations to keep up with new and innovative crimes. Today’s governments face challenges that affect the development of effective digital laws.

One of these challenges is the independence of technology from physical state territories. The interconnection of technology devices over the internet has no boundaries. This makes it impossible for any country to regulate all aspects of the technologies. Secondly, all states are not the same, and each enhances its technology-related laws according to its capabilities. While strong economies can afford robust IT infrastructure, other countries do not have the technical capacity.

Other factors that complicate technology regulation include the ability of major technology companies to bypass established regulations. Additionally, states are consumers of technology products and services developed by private corporations. Since they are not innovators, policymakers, and regulators, they do not understand the intricate technology systems that affect the regulatory decisions that must be made.

The above-mentioned are only a few of the challenges that make technology regulation complicated. Still, there is a growing need for digital governance and a digital constitution.

Why Global Collaboration is Crucial in Regulating Emerging Technologies

  1. Address ethical and social issues – significant ethical and societal issues, like data privacy and security, are brought up by emerging technology. However, international cooperation can help ensure coordinated and efficient responses to these issues.
  2. Growing competition for technological dominance – political, societal, and economic rivalries are driving technological dominance. Increased competition for elements of technology supremacy can only result in conflict, obstructing technology’s ethical use.
  3. Technology diffusing globally – in most cases, new technologies are available for adoption anywhere in the world. Thus, international regulatory frameworks must be coordinated to prevent competing or incompatible laws.
  4. Harmonizing standards – global cooperation can assist in harmonizing standards and laws for new technology, making it simpler for businesses to comply and lowering entry barriers for new players.
  5. Promote inclusivity – emerging technologies have the potential to make existing social and economic inequalities even worse. Collaboration on a global scale can ensure that these technologies are usable by everyone and do not reinforce or introduce new forms of exclusion.
  6. Enhance innovation – collaboration across borders can facilitate the exchange of knowledge, ideas, and best practices, leading to more innovation and faster technological advancement.
  7. Avoid existential risks – technology can potentially introduce threats that endanger life globally. Such risks might include nanotechnology weapons and engineered pandemics. However, developing strategic global legal frameworks that identify potential risks can help avoid the proliferation of dangerous and harmful technologies.

Existing Efforts for Global Collaboration in Regulating Emerging Technologies

There are numerous initiatives for international cooperation in regulating emerging technologies. For example, the Global Partnership on Artificial Intelligence (GPAI) brings together governments and business executives from across the world. Its goal is to ensure artificial intelligence (AI) is developed and deployed responsibly in a human-centric manner. GPAI’s main focus is on responsible AI, data governance, the future of work, and innovation and commercialization.  

The Organization for Economic Cooperation and Development (OECD) is another international organization where governments work together to solve common challenges and develop global standards. A good example is their recommendation on responsible innovation in neurotechnology, adopted by the OECD Council in December 2019. Other organizations working toward promoting global collaboration and coordination on emerging technology issues include the World Economic Forum (WEF) and the United Nations.

Unfortunately, there is still a lot of work to be done. Continued global cooperation is crucial to ensure that emerging technologies are created and used to benefit society. Currently, there is no global agreement on technology regulation; instead, regulators take different and sometimes conflicting standpoints.

Conclusion

The pace and impact of emerging technologies are likely to keep increasing. Although these developments improve human experiences, the potential for these technologies to disrupt social, economic, and political systems worldwide means that it is essential for governments, private companies, and civil organizations to work together to ensure that they are developed responsibly.