Displaying items by tag: capital gains tax

Saturday, 11 September 2021 08:18

Biden’s Death Tax Just Took a Big Turn


Advisors and their clients have spent much of this year worrying about Biden’s tax plans. Two of Biden’s budgetary priorities to raise tax revenue fall squarely on the wealthy: nearly doubling capital gains taxes and the elimination of the step-up in basis in inheritance. Well, speaking on condition of anonymity, according to Bloomberg, Washington insiders are saying the elimination of step-up in basis (often panned as a “death tax” by critics) seems be heavily watered down, or maybe dead altogether. The proposal received heavy opposition and Democrats may have already backed away from its inclusion in the budget plan, or may go with a heavily diluted proposal.

FINSUM: So there is also a big knock-on effect here as well—it means the Democrats likely won’t hike the capital gains taxes to 28% or more on the wealthy, as hiking it much without having eliminated the step-up in basis will likely end up costing the government money.

Published in Wealth Management


Advisors and their clients have spent the whole summer dreading Biden’s tax plans. Two of Biden’s budgetary linchpins for raising taxes on the wealthy are: nearly doubled capital gains taxes and the elimination of the step-up in basis in inheritance. Until now, they had merely been proposals. However, yesterday the House Democrats passed a budgetary resolution to bring a full vote on the topic. It is expected to pass along party lines.

FINSUM: The Democrats have a very narrow path to getting this passed as part of their $3.5 tn spending package. However, if they can get every Democrat in the Senate to sign, it becomes a reality.

Published in Wealth Management


This whole year it is has been assumed—almost as an unquestioned default—that taxes would rise under the Biden administration. For example, munis have surged in value on this expectation. However, that assumption seems to have gotten well ahead of itself as new developments suggest tax changes may be a way off yet. The big change is that the infrastructure package is coming up for a vote—potentially this week—and the deal which has materialized between the parties has no tax rises whatsoever in it. That means Biden’s plan to hitch tax rises to increased infrastructure expenditure have fallen through, at least for the time being.

FINSUM: So if this plan gets approved without any tax changes—which looks quite likely—it seems clear that clients will escape 2021 without any major changes to federal taxes (including long-term capital gains taxes). Therefore, any planning should take account of the fact that 2021 may be much more advantageous than 2022.

Published in Wealth Management
Friday, 23 April 2021 15:32

Biden’s Big New Tax Announcement


Joe Biden jut rocked markets in a big way. Yesterday afternoon, Bloomberg reported that Biden was planning to increase the capital gains tax rate on the wealthiest Americans by double, or up to just under 40%. The same rate as income taxes. Market reversed very sharply, but have been strong today. The tax would only affect Americans earning over $1m per year, which is 0.3% of the population, but taken in conjunction with other proposals to change the basis for capital gains taxes as it concerns inheritance, this is another big step.

FINSUM: The full scale tax overhaul on the wealthy has begun in earnest. Inheritance taxes and now capital gains taxes look likely to soar, with the latter not only on the wealthy. Advisors need to be very mindful of these changes as they disproportionately affect those who employ financial advisors.

Published in Wealth Management

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