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Want results? Ask your clients' opinion (part 1)

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Many people ask me about ways to use information about the economy to inspire prospects and clients to take action.

As you know from reading these columns, I do not tell my clients anything. After all, I do not really know anything. If the people creating fiscal and monetary policy, printing money and writing tax law are not sure what is going to happen, then it would be somewhat arrogant for me to pretend that I do.

Furthermore, if I have an opinion about the economy and my client has a different opinion, my client’s opinion is the only one that matters!

So instead of telling them things, I try to show them. In an organized way, I ask them their opinions about the economy. This helps them to develop a clear understanding of what issues they are worried about, what steps they should take to prevent being hurt by whatever happens, and how they can actually take advantage of negative events.

In this first installment of a two part column, I would like to share how you can make a presentation that will motivate your prospects and clients.

First, I ask my prospects and clients whether they think taxes will be higher in the future. Most of the time, they say yes.

But what if they say no? Using multiple sources, including, I show them that our country has a GDP of $17 trillion.

I show them we collect $3.2 trillion of taxes at the federal level, including income tax, Social Security, Medicare, corporate and estate taxes. I show them we collect $2.8 trillion of taxes at the state and local level, including income, property, and sales taxes. I then divide the combined $6 trillion in tax revenue by the $17 trillion of GDP and you arrive at 35 percent.

From that, it becomes obvious that taxes cannot be raised much further without destroying our economy. Therefore, we will not increase tax rates. Instead, we will come up with ways to TRANSFER wealth. Americans with money will face the greatest transfer of wealth in history.

This transfer will take place largely through the elimination of loopholes. Here are a few examples of legislation that is being considered:

The elimination of inherited IRAs or using the “stretch” provision. This option was never intended to be used as an estate planning tool, so this will reinstate laws that require taxes for qualified money inherited by non- spouses be paid in 5 years or less.

The end of step up in basis on appreciated assets at death. Why should these assets have complete relief from taxes?

The reduction of capital gains tax treatment.

The requirement of RMDs for Roth IRAs, which will return that money back to earning taxable interest.

But the really big change will be the elimination of the deductions for home mortgage interest, property taxes, state taxes, charity, health and insurance costs, casualty losses and gambling losses. To convince people to go along with this, they will tell America that only rich people itemize their taxes and so the changes will not hurt the poor or the middle class. We may not raise taxes, but we will definitely transfer taxes.

Then I ask my prospect or client: Will these changes affect you? Are we facing the greatest transfer of wealth in the history of our country? Will the necessary revenues come from people who have money or people who do not? Should people with money beware?

Next month I will finish this presentation that will provide many sales opportunities for you in the future and bring you the success you have been looking for.

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