The COVID-19 pandemic’s impact on the U.S. economy, coupled with 2020 election results, have led to the enaction of numerous tax-related laws over the past 18 months that may have implications for you.
The White House recently outlined the second half of the administration’s infrastructure plan, the “American Families Plan,” which would cost $1.8 trillion over 10 years. The cost of the plan would be offset by a series of tax increases on high-income earners. The first half of the plan, called the “American Jobs Plan,” would cost $2.25 trillion over 10 years and would be paid for with increases in corporate taxes.
As a result of these plans, members of the U.S. Senate and House of Representatives are introducing bills covering a broad spectrum of tax code changes. Whether any of these bills can or will become law is unknown, due in part to the balance of congressional power between Democrats and Republicans, especially in the Senate.
One of the keys to a successful wealth management plan is staying up to date on potential tax-law changes and understanding how they may affect your financial future. However, your strategic financial planning decisions should be driven by your goals and holistic financial strategy. We don’t recommend making quick decisions based on tax changes—especially proposals which haven’t been finalized.
Below is a brief analysis of the potential tax-law changes.