Page 12 - Investment Advisor May 2021

Beginnings

WASHINGTON WATCH

By Melanie Waddell

Experts Predict Which Tax ject to higher tax rates. The current 40%
In a shift, larger estates would be sub-

Hikes Are Most Likely tax rate would be raised to 45%. Taxable
estates greater than $10 million would be

Tax measures floated by President Biden and taxed at 50%, amounts greater than $50
million at 55%, and amounts greater than
lawmakers prompt a hot debate. $1 billion would be taxed at 65%, accord-
ing to the Joint Committee on Taxation.
The same rates would apply for gift
taxes, for which the threshold would be
lowered to $1 million.
“Introduction of this legislation is a big
step forward to significantly strength-
ening the estate tax,” Frank Clemente,
executive director of Americans for Tax
Fairness, said in a statement.
During an early April Senate Budget
Committee hearing, titled “Ending a
Rigged Tax Code: The Need to Make
the Wealthiest People and Largest
Corporations Pay Their Fair Share of
Taxes,” Sanders said that his bill would
“demand that the families of the mil-
lionaire class not only not get a tax break
but start paying their fair share of taxes.”
resident Joe Biden and mem- While it appears that a wealth tax Sanders also introduced the same day
bers of Congress “are already as put forth by Sen. Elizabeth Warren, the Corporate Offshore Tax Dodging
P foreshadowing personal, trust D-Mass., “is off the table,” Hutchinson Prevention Act, “legislation that would
and estate tax increases in the com- told Investment Advisor in early April, prevent corporations from shifting their
ing months,” according to Allison “changes to the way the income tax basis profits offshore to avoid paying U.S.
Hutchinson, managing director and of assets are taxed (or not taxed) at death, taxes and would restore the top corpo-
resident tax expert at Brown Brothers as well as increases to personal income rate rate to 35%, where it was before
Harriman. tax rates on wealthy individuals and [Donald] Trump became president.”
Where these proposals end up, how- changes to the taxation of estates and
ever, is negotiable. trusts, are all very much on the table.” LIKELY CHANGES
As Biden noted in early April in Sen. Bernie Sanders, I-Vt., released in Hutchinson noted that “It may be eas-
unveiling his comprehensive propos- late March the For the 99.5% Act, legis- ier for interested parties to negotiate
al, The Made in America Tax Plan, to lation that would restore the estate tax for changes to the estate/gift tax rate
increase investment in infrastructure exemptions to the 2009 thresholds of $3.5 (currently 40%), or the exemption from Yuri Gripas/Abaca/Bloomberg
by, in part, boosting the corporate tax million per individual and $7 million per estate/gift tax (currently $11.7 million),
rate: “Debate is welcome. Compromise married couple from the current exemp- where they have a number to debate. The
is inevitable. Changes are certain.” tions of $11.7 million and $23.4 million. policy negotiations around changes to

10 INVESTMENT ADVISOR MAY 2021 | ThinkAdvisor.com