Displaying items by tag: wealthy

(Washington)

One of Biden’s most important campaign promises was that he would not raise taxes on the middle class…see the full story on our partner Magnifi’s site

(Washington)

Many advisors may not have realized it yet, but the new COVID relief package passed by Congress recently has many benefits for upper middle class Americans and even those in the mass affluent category (which constitute tens of millions of clients for advisors). Other than the $1,400 checks, there are also two lesser known details advisors need to be aware of. If a client qualified for a check last time, but did not get one, they can claim the money they would have been entitled to as a credit against their taxes. It is a bottom line deduction that comes directly out of taxes owed. If no taxes are owed, they should get the credit as a refund check Additionally, the package offers enhanced child tax credits. This is $3,600 per child under 6 years old, and $3,000 per child between 6 and under 18 years old. The latter used to be for those under 17, so this helps those with 17 year-old children. Finally, those who have student loans that will be forgiven will not have to pay taxes on the forgiven amounts, which is a massive benefit for those who qualify.

FINSUM: There is a lot more to this package than many realize. Advisors should take a deeper dive to see what applies to their clients.

(New York)

Any way you slice it, 2021 seems like it will be a good year for munis, and not because the financial condition of municipalities is so great (it isn’t!). One of the main reasons why is the incoming administration and Congress. Between Biden’s stimulus plans and the now Democrat-controlled Senate, the odds for large amounts of local and state financial support from the federal government are quite high. This part of equation is well understood, but there is a second aspect of the Democrats’ plans that will also be beneficial to munis: they plan to raise taxes on the wealthy. Higher taxes on the wealthy would directly increase demand for munis bonds, which means they should have a tailwind this year.

FINSUM: The part about increased taxes and how it drives muni demand has not been discussed enough. We think this is an excellent angle and combined with financial stimulus, should set up a couple years of smooth sailing.

(Washington)

Wealthy people living in the US may have a natural apprehension to the idea of Bernie Sanders becoming president. The self-described socialist aims to greatly raise taxes and redistribute wealth as is common in socialist agendas. However, to get some context on how Bernie’s policies may actually play out, it is useful to look at the only functioning socialist democracies in the world—Scandinavia. What is very interesting about the Scandinavian countries is that they actually have the highest percentage of billionaires per capita in the world. The same also applies for those with a $100m net worth or more, and even those with $30m or more.

FINSUM: These countries have the highest percentage of wealthy per capita by a wide margin, so it appears socialist democracy does end up having some wealth concentrating effects.

(New York)

Barron’s has published a piece which covers a survey of wealthy Americans. The survey sought to find out how the wealthiest Americans felt about Senator Elizabeth Warren’s plan for a wealthy tax of 2-3% on those with over $50m or over $1 bn in wealth. The results were surprisingly, with 60% of wealthy respondents saying they would embrace the plan. The feedback was split on party lines, with 88% of Democrats agreeing, 62% of independents, and 36% of Republicans in favor of it.

FINSUM: We are somewhat skeptical of these stats. Advisors, please email us with any anecdotes on how your clients have reacted to this plan.