President Joe Biden’s American Families Plan still has to make its way through the Senate before it becomes law, and the final legislation may look different from the version approved by the House Ways and Means Committee on Wednesday that included $2.1 trillion in new levies mostly focused on corporations and the wealthy.
But it is important for advisors and their clients to know what the House’s plan contains now because they may have only months, weeks or just days to make crucial decisions that stand to have a huge impact on clients’ lives, according to Jeffrey Levine, Buckingham Wealth Partners director of advanced planning and Kitces.com director of advisor education.
Significant changes to U.S. tax policy for 2022 seem likely, including around income tax rates, rules regarding retirement accounts, estate and transfer laws and much more, he said Wednesday in the Kitces.com webinar “Analyzing Biden’s New ‘American Families Plan’ Tax Proposal.”
Many of the features of Biden’s original plan are included in the House plan, most significantly the raising of income and capital gains tax rates on high earners, Levine noted.
“I think there’s actually substantially more here for us as advisors than we had in the Tax Cut and Jobs Act” of 2017, he said. “Any time there’s a tax increase, there’s much more of an urgency than when there is a tax decrease.”
The changes that have been made suggest that a lot of negotiations have already taken place among Democrats so, if the legislation becomes law, its final form will likely be similar to the House plan, Levine explained in the webinar and at Kitces.com.
See the gallery above for 10 top takeaways from the webinar that advisors should keep in mind.
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