Financial Planning Considerations Under Joe Biden’s Proposed Tax Plan

With the U.S. presidential election only a few weeks away, it’s timely to evaluate the details of Joe Biden’s tax plan, the potential implications and some strategies that might be worth considering.

Before we begin, it’s worth noting that even if Biden is elected, his tax plan becoming a reality would likely hinge on Democrats also gaining control of the Senate this November. And, even if that occurs, it could prove difficult to increase taxes if the 2021 economy is still fragile due to COVID-19. With that said, it is prudent to understand what the tax implications might be so we can evaluate which planning strategies could be beneficial in advance.

Income Tax Impacts

If you earn more than $400,000 per year, Biden’s income tax plan would negatively impact you in several ways:

  • Under Biden’s plan, the top tax bracket, which is currently $622,051 for married couples filing jointly

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An analysis of Joe Biden’s tax proposals, October 2020 update | American Enterprise Institute

Key Points

  • Using the Tax-Calculator (3.0.0) microsimulation
    model, we estimate that Joe Biden’s propos­als would raise federal revenue by
    $2.8 trillion over the next decade (2021–30).
  • The majority of new federal revenue would come
    from businesses and corporations ($1.9 tril­lion). The remaining revenue would
    come from individual income and payroll tax increases ($616.8 billion) and an
    increase in estate and gift taxes ($276.4 billion).
  • In 2021, Biden’s proposals would increase taxes,
    on average, for the top 5 percent of households and reduce taxes on households
    in the bottom 95 percent. In 2030, Biden’s proposals would increase taxes, on
    average, for households at every income level, but tax increases would
    primarily fall on the top 1 percent of income earners.
  • Using the open-source OG-USA (0.6.2) model, we
    estimate that Biden’s proposals would reduce gross domestic product (GDP) by
    0.16 percent over the next decade, slightly increase GDP the second decade
    (0.19
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Tax Law Changes Allow For Year-End Charitable Planning Opportunities

As we enter the final months of this unusual year, many people will be considering year-end charitable giving. Charitable gift planners and development officers know this giving season all too well. It goes without saying that 2020 has been a challenging year, and the fourth quarter seems to have snuck up quickly. Given the host of charitable tax law changes over the last 36 months, a refresher might be useful.

The 2017 Tax Cuts and Jobs Act: First, it is worth remembering that the 2017 Tax Cuts and Jobs Act increased the deductibility of cash contributions. Prior to the TCJA, cash gifts were deductible only to the extent of 50% of the donor’s adjusted gross income. TCJA increased that to 60%.

This 60% contribution obviously makes cash gifts more appealing for individual donors. However, it also can act to reduce the unrelated business income tax

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Apologists For Joe Biden’s Tax Proposals Miss The Point

“Every four years a Democrat runs for president on a platform that includes higher taxes for the wealthy. And every four years a group of people predicts that the sky will fall if those plans are implemented. Yet every time their plans have been implemented, the sky hasn’t fallen.” Those are the words of Harvard professor Jason Furman, who was Chairman of the White House Council of Economic Advisers during Barack Obama’s second presidential term.

Furman is right. It’s never made sense that Republicans would cry “recession” every time a Democrat would promise tax increases. This isn’t to defend tax increases. Rest assured this write-up will not.

Still, Republicans vandalize the word “recession” when they say tax cuts will automatically cause them. Painful as they are, recessions have historically signaled an economy on the mend. During boom periods, it’s only natural that lenders will reach a bit in terms of

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OECD’s corporate tax reform proposal gaining broad support – Scholz

FILE PHOTO: German Finance Minister Olaf Scholz attends a joint news conference with Justice Minister Christine Lambrecht in Berlin, Germany, October 7, 2020. REUTERS/Hannibal Hanschke

BERLIN (Reuters) – More than 130 countries have agreed on a blueprint to introduce global rules on corporate taxation to be discussed by G20 finance ministers next week, German Finance Minister Olaf Scholz said on Friday.

“With a unanimous agreement on a blueprint for reforming the global corporate tax code we have taken a major step forward,” Scholz said in a statement. “This is a positive signal and I’m sure that by the summer of next year we will be able to reach a final agreement on this reform plan.”

The Organisation for Economic Cooperation and Development (OECD) has been developing rules to make digital companies pay tax where they do business, rather than where they register subsidiaries. This could boost national tax revenues by

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‘Irresponsible’: Dutch Legal Advisor Criticises Plan for Unilever ‘Exit Tax’ | Investing News

AMSTERDAM (Reuters) – A top Dutch legal body said on Friday that it was probably not “legally sustainable” to levy a one-time tax on Unilever over its plan to unify management in a single London headquarters.

The bill by the opposition Green Left party for an “exit tax” is one of the few remaining hurdles for Unilever as it simplifies its Anglo-Dutch structure. British shareholders are due to vote on the move on Monday.

Unilever has said the tax would cost it 11 billion euros ($13 billion) if enacted, enough to derail unification.

The Dutch Council of State, which advises parliament on the legality of bills, said on Friday the proposed tax would violate basic principles of the rule of law.

If enacted, “the chance that this proposal will turn out to be not legally sustainable is so great that (we) consider introducing it irresponsible,” the Council said in its

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Your CARES Act Benefits Experts, Magellan Jets, Offers Tax Holiday Strategy Consulting on Private Jet Travel in 2021 & Beyond

Leading Private Aviation Solution Provider Advises Guests & Businesses on Utilizing the CARES Act Tax Exemption for Private Jet Travel

As we enter the final few months of 2020, your private aviation consultants at Magellan Jets are thrilled to provide their expertise on tax holiday benefits for individuals and organizations, so they can better understand the Coronavirus Aid Relief and Economic Security Act (CARES Act) and its impact on their private jet travel.

With companies across the country eager to get back to business again, the CARES Act incentivizes organizations to utilize the safety of private aviation by suspending certain excise taxes on private jet travel booked through December 31, 2020. The tax exemption also extends to any jet card or membership purchases made before the end of the year, even if they aren’t used to fly until 2021 or beyond.

In response to the tax holiday, Magellan Jets is

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OECD’s Corporate Tax Reform Proposal Gaining Broad Support: Scholz | Investing News

BERLIN (Reuters) – More than 130 countries have agreed on a blueprint to introduce global rules on corporate taxation to be discussed by G20 finance ministers next week, German Finance Minister Olaf Scholz said on Friday.

“With a unanimous agreement on a blueprint for reforming the global corporate tax code we have taken a major step forward,” Scholz said in a statement. “This is a positive signal and I’m sure that by the summer of next year we will be able to reach a final agreement on this reform plan.”

The Organisation for Economic Cooperation and Development (OECD) has been developing rules to make digital companies pay tax where they do business, rather than where they register subsidiaries. This could boost national tax revenues by a total of $100 billion a year, the OECD estimates.

But a recession sparked by the coronavirus in many industrialised nations have cast doubt on

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OECD’s corporate tax reform proposal gaining broad support: Scholz

BERLIN (Reuters) – More than 130 countries have agreed on a blueprint to introduce global rules on corporate taxation to be discussed by G20 finance ministers next week, German Finance Minister Olaf Scholz said on Friday.



Olaf Scholz in a suit sitting at a desk: FILE PHOTO: German Finance Minister Olaf Scholz attends a session of the Bundestag, in Berlin


© Reuters/HANNIBAL HANSCHKE
FILE PHOTO: German Finance Minister Olaf Scholz attends a session of the Bundestag, in Berlin

“With a unanimous agreement on a blueprint for reforming the global corporate tax code we have taken a major step forward,” Scholz said in a statement. “This is a positive signal and I’m sure that by the summer of next year we will be able to reach a final agreement on this reform plan.”

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The Organisation for Economic Cooperation and Development (OECD) has been developing rules to make digital companies pay tax where they do business, rather than where they register subsidiaries. This could boost national tax revenues by a total of $100 billion

Read More

These households can expect a tax increase under Biden’s tax plan

Democratic presidential nominee and former vice president Joe Biden speaks at a campaign stop in Miami on Oct. 5, 2020.

Roberto Schmidt | AFP | Getty Images

Taxes could rise for the wealthiest households  in a Joe Biden presidency.

However, you might want to think twice before making any dramatic moves.

Indeed, Biden’s tax plan was a topic of discussion during the debate between vice president Mike Pence and Sen. Kamala Harris, D-Calif., on Wednesday night.

The two clashed over the effectiveness of the Tax Cuts and Jobs Act — President Trump’s tax overhaul that went into effect in 2018 — and the plan Biden has drafted.

During the debate, Pence asserted that President Trump has cut taxes across the board. Though indeed the Tax Cuts and Jobs Act roughly doubled the standard deduction and reduced individual income tax rates, those provisions will end after 2025.

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