Sunday, May 1, 2022

Future Returns: A Wealth Management Take on Biden’s ‘Billionaire Tax’

Estate planning

The Biden administration’s recently proposed billionaire minimum income tax legislation is the most significant proposed change since the Reagan era in the 1980’s.

The proposed legislation would apply to households worth over $100 million and will tax at least 20% of full income, including unrealized appreciation. It is important to note that households already paying that amount won’t face any additional tax under the proposal. At this time, it is unclear whether the proposed legislation will apply to trusts.

The White House characterizes this as a new way to make taxation more equitable and contends that within 10 years the deficit will be cut by about $360 billion. This idea has become increasing popular with American voters, and if this legislation does not prevail, it opens doors for opportunities to explore ideas further in that direction.

Some critics have raised the issue that a tax on wealth is unconstitutional. Pam Lucina, chief fiduciary officer at Northern Trust Wealth Management in Chicago, encourages investors not to panic or build their wealth management plans around tax law predictions. Instead, Lucina recommends centering plans around financial goals and remaining flexible instead. “Do not rule out the chance to make changes.”

For more information:

See Rob Csernyik, “Future Returns: A Wealth Management Take on Biden’s ‘Billionaire Tax’”, Barron’s PENTA Magazine, April 12, 2022.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

Current Affairs, Estate Planning – Generally | Permalink


Post a comment