Michael Lodge, NCPM, CRTP - www.lodge-co.com
Nationally Certified Professional Mediator and Business Advisor
First let me state that as I write this, Biden has not been certified by the States as a winner in those states, and there are ongoing lawsuits on voter fraud in several states. So at this moment we don't have a clear winner. But if he does win, what are the tax issues out there that we could be facing. I like how Money magazine explains their view.
Money - "As a candidate, President-Elect Biden advocated a different set of tax priorities, promising to raise corporate taxes and income taxes on households making more than $400,000, raising upwards of $2 trillion over the next decade. At the same time, Biden would also temporarily expand the Child Tax Credit to a maximum $3,000 from $2,000 for children under 18, and provide a $600 credit for children under 6. Biden also proposed tweaking the tax treatment of 401(k) retirement accounts, in an effort to make the system’s benefits skew less toward the wealthy.
Given Republicans’ deep aversion to tax hikes, it seems unlikely that key parts of Biden’s plan would advance if Democrats fail to retake the Senate. One important wrinkle: Many provisions of the 2017 Trump tax cuts aren’t permanent, and are set to expire during the upcoming Biden Administration, which could force the parties to negotiate on at least some issues. However, the key provisions affecting individual’s income taxes are not slated to expire until December 2025."
Now there are some if's. If the Republicans continue to control the Senate, anything regarding taxes or 401K bills has to go through the US Senate. None of them will get through and may never get to the floor. Money magazine is correct on the natural ending, but the tax cuts bill, they end in certain years. So those tax cuts will naturally disappear. The other thing to remember, Biden talks about taxing the higher end earners at a higher tax rates. Now what Democrats view a rich person never ends up correctly in the law. When Obama said that his healthcare and economic plan was only going to touch millionaires and above it hit every American at lower wages. So be very concerned as to what level a Democrat thinks someone is rich. It is never what they say it is. Biden wants to change the 401K tax deduction for the "rich" so they get lower tax benefits, but I will promise you this - the Democratic rich will be you.
Now my suggestion to you is this. Watch what is going on in Congress and out of the White House. Challenge your members of Congress and the Senate. Be aggressive in fighting for your financial and tax issues. During a four year Biden administration challenge everything that goes through Congress and headed to the President's desk. Protect your freedoms, and use your speech to make a difference. Taxes play a big part in our personal lives and it should be part of your financial planning and expressing your voice to protect your finances.
Let's see what happens after the court battles are exhausted or won. Remember - NO ONE HAS WON OFFICIALLY. Stay calm, respect the results, but keep fighting for your financial lives and freedom.
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Michael Lodge is a Nationally Certified Professional Mediator specializing in business disputes, as well as family conflicts. He has written three books and hosts an international podcast on IHeartRadio and other podcast media stations.