You'd think advisors were vehemently opposed to raising taxes on the wealthy, and for good reason; If their clients have less money, they have less money. But I was surprised to hear that nearly a third (30 percent) of advisors polled by the Financial Services Institute said they believe Americans making over $200,000 should be taxed at a higher rate. That’s still a big percentage, given what that could mean for their clients.
What’s even more puzzling, a third of advisors surveyed said capital gains taxes should increase to 20 percent or 25 percent (from the current rate of 15 percent). That said, the majority of advisors (70 percent) believe taxes shouldn’t go up on the wealthy, and 58 percent believe capital gains rates should stay the same in 2013. No surprise there. Here are some of their thoughts on taxes and the pending fiscal cliff issue:
If a deal is reached, will it include higher marginal tax rates for “wealthy Americans” ($200k individually and $250k as a family) or curbs on deductions, or both?
- Higher marginal rates 18 %
- Curbs on deductions 9 %
- Both 72 %
Should Americans making over $200k individually and $250k as a family be taxed at a higher rate?
- Yes 30 %
- No 70 %
Will taxing Americans making over $200k individually and $250k as a family at a higher rate dampen investing and saving?
- Yes 68 %
- No 32 %
What should the rate on capital gains taxes be in 2013?
- Current rate (15%) 58 %
- 20% 32 %
- 25% 2 %
- Ordinary income rates 3 %
- Other 6 %
Here’s some good news. Our friend Andy Friedman, principal of The Washington Update, says there could be some concessions related to current estate and gift tax rules:
Although President Obama seems determined to extract more income taxes from affluent taxpayers, his public pronouncements have been much less focused on the estate tax. Thus, there is a possibility he might agree to extend the current estate and gift tax rules in exchange for Republican concessions to raise the income tax. Given his stated determination to impose his election “mandate,” of course, such a result is far from assured.