Displaying items by tag: wealthy

(Washington)

It has largely faded from the news, but Americans in high tax states are feeling the pinch from the SALT cap limits. States are currently mounting a last ditch attempt to stop the new limit through a highly creative legal argument that relies on court precedent from as far back as the Civil War. However, early indications are that the push will fail, finally sounding a death knell for any hopes the cap would be overturned.

FINSUM: As one of our esteemed readers pointed out to us, this SALT cap has much more significant implications than real estate prices or asset allocations. The bigger worry is that the tax-home migration of the wealthy could hollow out the public finances of already precarious state and local governments.

(Washington)

Advisors need to be worried about 2020 because some major changes may be on the way. Some of the most prominent Democrats, including presidential candidates are putting forth incredibly progressive proposals which call for heavy tax hikes. For instance, Elizabeth Warren, who will be running for president in 2020, is calling for a wealth tax of 2-3% on those with over $50m of assets. Economists say such a measure would raise almost $3 tn over a decade. Democratic party darling Rep. Alexandria Ocasio-Ortez (D-N.Y.) has put forward a plan calling for up to 70% tax rates on the wealthiest Americans.

FINSUM: In our view, the specific plans are not as important at the moment as the overall direction of the Democratic party and its candidates. While this is very divisive policy, it is a reflection of how polarizing national politics have become. It is also notable because this kind of major plan is the type of platform that can really drive Democratic policy going forward. This may become a rallying cry for the party.