While Washington and the nation were focused on President Obama’s early September speech in which he unveiled new economic initiatives and vowed to cut taxes for the middle class, advisory trade groups remained focused on one of their top goals: shaping how the Securities and Exchange Commission (SEC) should proceed with a fiduciary rule for brokers.
President Obama said in his speech in Ohio that he wanted to let President George W. Bush’s 2001 and 2003 tax cuts expire at the end of this year.
Under the tax plan passed by the previous administration, Obama said, “taxes are scheduled to go up substantially next year–for everybody.” He continued, “I believe we ought to make the tax cuts for the middle class permanent. … These families are the ones who saw their wages and incomes flat-line over the last decade–you deserve a break. You deserve some help.” The proposed income tax cuts for those making less than $250,000 per year, Obama said, would benefit 98% of Americans.
Marc Caden, senior vice president of government affairs for the Association of Advanced Life Underwriting (AALU) in Washington, says that while it looks likely that Republicans will win control of the House and some seats in the Senate (see sidebar), he foresees the tax debate playing out after the mid-term elections. He believes “a deal on taxes” between Congress and the Obama Administration will come in the earlier part of 2011.
It goes without saying that the outcome on income, capital gains, dividends and estate taxes is a critical issue for advisors and their clients, but of equal importance is the outcome on applying a fiduciary standard to brokers. Now that the SEC’s comment period has expired regarding the study the regulator is to conduct on putting brokers under a fiduciary standard, industry trade groups are gearing up to continue their lobbying as the securities regulator heads into the rulemaking process.
[Read more about the implications of a Republican-controlled Congress.]