“The Tax Man Cometh” – Written by Jack Dewald
The binge of government spending is naturally leading to a host of proposed tax changes. Your clients are naturally concerned, if not in outright panic mode!
For each $1 Trillion of spending, it takes 10 Million tax payers to each pay $100,000 of additional taxes!
New & proposed spending lines up like this:
- $ 900 Billion Covid package passed December 2020
- $1.9 Trillion Covid package passed March 2021
- $2.0 Trillion “Infrastructure” package proposed
- $1.0 Trillion “American Families Plan” proposed
That’s $5.8 Trillion so far, and I’m betting more will come.
That means 58 Million folks need to “pay their fair share” of $100k more–each. Not couples…each!
The last numbers I saw indicate that there are about 30 Million folks that make over $100K per year. The total amount of income taxes paid last year was $3.5 trillion, and 80% of incomes taxes paid is by those already earning more than $100K per year.
You do the math…you’ll see that it won’t just be “the rich” that are going to pay more taxes.
The proposed increases in the capital gains tax, corporate & individual tax rate is going to cause a herd rush of tax harvesting if the proposal gains serious traction. If these amounts are large and coupled with other income, those over $1Million of income face a likely 43.8% cap gains tax going forward. Add in the new rules of 10-year mandatory distributions for non-spousal heirs of qualified fund account balances and concern over inheritance distributions, and it’s even more uncertain for your clients. And did I mention loss of step up in basis at death and a higher estate tax rate and lower exemption?
PPP Loan forgiveness and the allowance to “double dip” the expenses paid also means many small & medium business owners are sitting on excess profits that will be harvested.
Many of your clients are going to look for ways to generate tax-free income, and they will have LOTS OF CASH TO DO THAT!
Let ASI show you how to creatively use life insurance, the tax-free build-up of cash value, and a strategic policy structure to provide your clients with YEARS of tax-free distributions!