Approximately $600 billion in tax increases and government spending cuts are scheduled to automatically take effect at the beginning of 2013. Many analysts have said this could bring serious consequences for the American public and could push the U.S. economy over the edge of what they have labeled a “fiscal cliff.”
NAIFA’s primarily concern is that the inability of lawmakers to resolve the situation will create chaos and make it hard for advisors to help their clients plan for the future.
"NAIFA urges Congress to resolve the tax issues before the end of the year,” said NAIFA President Robert Miller. “Retroactive changes to tax laws put American families and businesses in a costly and paralyzing situation."
While advisors certainly care about tax rates, estate tax rules, and the other issues included in the fiscal cliff debate, NAIFA is most concerned about having a firmly established set of rules rather than advocating for a specific rates or exemptions.
Knowing how clients will be taxed obviously makes it much easier for advisors to help these families and businesses plan for the future so that they can meet their obligations and thrive financially.
“The uncertainties over rates, capital gains and dividends, the alternative minimum tax, estate tax rules, and other issues make effective financial planning difficult for everyone from individual families to large corporations,” Mr. Miller added. “Still, NAIFA members are prepared for the worst and are advising their clients on how to cope with the impact of potential tax hikes.”
As always, NAIFA members are doing their best to prepare their clients for all financial eventualities. A little help from Congress could make their jobs a bit easier.