“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!

PERSPECTIVE:

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.

SITUATION:

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.

RESULT: 

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!

SOLUTION:

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!