Unlocking Real Value Blog

AK In The News: Wealthy Fear Fiscal Cliff Tax Hikes

I was asked to comment in FundFire (A Financial Times Service) on the results of a poll seeking to find out what high net worth individuals feared  most about the fiscal cliff. 56% of respondents feared increases in income taxes and capital gains taxes the most (the top two answers), following by 21% fearing equity market turmoil.

My thoughts on the matter, to quote the article: “Even if a deal is made, and more progress is made next year, it’s likely that the many deductions the wealthy have enjoyed will vanish, says Andrew Klausner, founder of New York, N.Y.-based AK Advisory Partners. “The mortgage interest deduction may be trimmed or eliminated. Taxes on dividends are likely to increase,” he says. “The poll reflects the growing realization that taxes in some form are going up for investors.””

Political views aside, the only way to solve this country’s fiscal problems will be a balanced approach – revenue increases and spending reductions. Nothing else will work – despite what the politicians are saying.

Some taxes are already slated to go up with the implementation of some aspects of Obamacare next year. The implications for advisors is that they should be meeting with clients now to review their individual tax situations. Planning and taking appropriate action now will reduce the number of negative surprises your clients will face next year.

I don’t see any reason to panic, or make rash decisions about your stock portfolios. But prudence dictates that you at least take a look, weigh your various options, and act appropriately. You still have about a month!

Leave a Reply