My Thoughts on Upcoming Tax Law Changes

Proposed tax law changes are being sold to us like a timeshare. They’re saying these changes will only impact the wealthy and not the average American. We’re being told that we’re going to receive all these extra benefits from the changes.

I love a good beach vacation. My wife and I (and maybe our kids), are sitting by the beach having a lot of fun and we’re not here at home worrying about things. Most people know how fun beach vacations are. There’s an entire industry of timeshare salespeople selling you on how wonderful these vacations are and are going to be.

Sure, there’s a little of money out of pocket. But once you pay that you’re all done and you have all these wonderful things that the timeshare is going to do for you.

Unfortunately everyone who’s bought a timeshare knows that those management costs increase, and increase, then increase some more, every single year. It becomes really hard to use that timeshare and get the value out of it every single year.

What’s being sold to us in Congress is essentially a timeshare sale.

They’re talking about a change in the tax laws that are only going to impact the wealthy. They’re saying it’s not going to impact the average person and that we’re going to get all these extra benefits from the changes.

I’m not here to argue the extra benefits. “Are they good? Are they bad? Are they the right things?” But we have to understand what these benefits really are.

For some people, a timeshare may be a great deal if you understand all the parameters that come along with it. And before we sign off on this tax law change, we need to understand all the things that it’s going to impact.

So what are we looking at?

1. Capital gains tax changes

I dive deeper into the capital gains tax changes in this video. What they say is you had to have an income of over $1 million dollars before you had those higher income tax changes. The average person thinks that’s not going to impact me.

2. Income tax changes

We have these income tax changes for the lower brackets where most Americans sit most of their lives – It’s not going to have many major changes. But those higher brackets, there are some pretty significant changes there.

3. Estate tax changes

Right now for the estate tax, it isn’t going to impact a lot of people. As they make changes to this, that will impact people.

So let’s understand what these new tax law changes really are. The changes really won’t impact the day-to-day life for most Americans. Most Americans don’t have income over $1 million dollars, and won’t need to worry about these higher tax brackets.

Some of these proposed tax changes can be categorized as wealth transfer taxes. First, they’ve made more things taxable to you on your death. These new taxes are part of the capital gains tax changes

Second, they’ve announced several of these goofy triggers that come into play when you’ve hit certain income levels. I relate them to a giant wash of taxes that you have no control over.

Essentially, if you plan on leaving money to your next generation, and if you’re going to die with any assets, they’re going to now trigger those big taxes.

So even if tax law changes aren’t going to impact you today, if you don’t do some serious planning right now, they will have a major impact on your loved ones for the rest of their lives.

I hope you got some value out of the video we just shared with you. And if you know somebody else that could find value in this, please feel free to share it with them. If you yourself would like to talk further about this, please use the link below to book a 15 minute phone call with our office. Thanks.