One of the things that most people agree will happen early in a Trump administration is tax reform. They're as confident that it will happen as lots of people were confident of a Hillary Clinton victory, so we'll see how it all shakes out. What's not really up for debate is who will benefit from Trump's tax plan:
[F]inancial advisers to the wealthy are starting to bet that tax rates will fall as early as next year. And they’re telling clients to make their move before the end of 2016 to maximize the payoff.
Rich Americans generally have the most flexibility in taking advantage of these tactics. “You’re really only talking to a small percentage of people who can really react to things like this,” said Tim Steffen, director of financial planning at Baird. But middle-income taxpayers, including retirees, should also consider taking steps now that might save them extra money in the event of a tax cut.
For those of you with HNW clients, this means you'll be busy for the next 6 weeks! The rule of thumb is to defer income until a later period (when rates may be lower) and take deductions now (when they're more valuable). And since Trump has proposed to eliminate the estate tax, for the love of God, advise those rich elderly clients not to die yet!
If Donald J. Trump follows through on his campaign promises, a host of taxes that affect only the very richest Americans may be eliminated, along with almost all tax incentives to be philanthropic. As a result, wealthy families may find it much easier to amass dynastic levels of wealth.
At the top of the list is the estate tax. Currently, the rules are straightforward: A married couple is exempt for the first $10.9 million in their estate, and they pay a 40 percent tax on the amount above that.
Mr. Trump’s campaign proposal seems straightforward: Repeal the estate tax — the death tax, in his words.
If you're just getting caught up on all this, NPR has the details and you can check out the analysis from the Tax Foundation and Tax Policy Center. It could be a boomtime for tax planning experts. Better get while the getting is good.
CEOs talk politics (or not)
While a couple of CEOs — Pepsi's Indra Nooyi and Grubhub's Matt Maloney — haven't minced words on the election of Donald Trump, most business leaders are choosing their words more carefully. This Fortune article features EY's Global Diversity Officer Karyn Twaronite reassuring everyone about their stance on workplace inclusion:
[T]he day after Donald Trump defeated Hillary Clinton to become president-elect, Twaronite’s inbox swelled with concerns. She received about 300 emails with questions about issues from visas and immigration to women’s rights.
“We want to make sure people know they won’t get in trouble for asking questions,” she said.
It also quotes from a "memo" Steve Howe, EY's US Chairman sent to employees:
“I personally believe that the business community can and will be a catalyst for healing,” he wrote to EY employees. Howe went on to encourage people to “support, connect and dialogue with each other.”
The Big 4 have been vocal over the years about diversity and inclusion being a large part of their culture, so I'm a little surprised that we haven't heard publicly from their leaders on the election of a guy whose words and actions seem to be the polar opposite of what they purport to stand for. I don't think anyone's expecting a condemnation from Tim Ryan or Cathy Engelbert, but at the very least, you'd think some PR wordsmith could craft something that will put people at ease without inviting Trump's rancor.
If you've seen other comments from any accounting leaders on this, definitely send them our way.
Has Donald Trump released his tax returns?
Nope! My hunch is that the Trump tax returns fervor will die down until he breaks another tradition of politics — sitting presidents disclosing their 1040s. So unless there are strenuous objections, we'll retire this section of ANR until further notice. Wasn't that fun?
Previously, on Going Concern…
In Open Items, someone's deciding between a tax internship and a position at a startup. And an international tax associate is wondering if they don't know anything.
In other news:
- American Apparel Files for Bankruptcy Again, Agrees to Sell Brand
- EY Report: Brexit Could Cost London 18,000 Legal, Accounting Jobs
- Parts of Dodd-Frank might survive.
- AdultFriendFinder network hack exposes 412 million accounts
- Wannabe Weatherman Arrested for Starting Wildfire to Get Facebook Views
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