We’re six months into our new president’s term, and support for his tax agenda is waning. The President’s campaign promise of higher taxes doesn’t appear to have the votes necessary for passage.
The three biggest parts of the tax plan include
1 – Increasing the domestic corporate rate from 21% to 28%
2 – Increasing the top individual rate from 37% to 39.6%
3 – Increasing cap gains rates on those earning more than $1M from 20% to 39.6%
The GOP remains resolute against any tax increases, but the biggest change seems to be coming from economists. They’re concerned about how raising taxes would risk our fragile economic recovery.
It’s hard to believe that anyone would need to go to school to figure that one out.
That being said, a smaller tax hike is still possible. The administration and congress are going to need to find some way to pay for the infrastructure plan and stimulus packages.
Sooner or later, they’re going to need to balance the books.
Let me leave you with this.
Over thirty years ago, I was in a tax course at DePaul that was named something like, “How Taxes Affect Populations.” This was one of the Easy A classes that accounting students take, but it impressed one concept on me that I never forgot. That concept is
Voters Vote With Their Feet.
The last eighteen months have been difficult. We went from everything being shut down in a pandemic, to riots and looters in our streets. Last year, I began fielding questions that were relatively new.
Clients began to ask me how much their taxes would change if they moved somewhere else.
The clients that asked weren’t your regular, run-of-the-mill, Dick and Jane down the street types. They were all one percenters. Two have since moved; one to Tennessee and the other to the Carolinas.
I’m glad that I maintain the Federal license so that I can handle anyone, no matter where the business or individual resides, inside the United States.
One of the things that has changed is how easy it is to manage many businesses remotely. It’s now entirely too easy to move out of a state or a country and still maintain many businesses without interruptions.
I don’t understand when elected officials openly say that they want to raise taxes. Sooner or later there’s a straw that breaks the camel’s back and people move.
I suppose that I could do the math to figure out how many regular taxpayers it would take to replace the one percenters that Illinois just lost. But that would presuppose that people were actually moving into our state.
Sooner or later, Voters Vote With Their Feet.
We’re all going to get through this. Let’s get through it together.
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