10039903_MCM_OCT2021

MYFINANCES

The Spooky New Tax Proposal

BY JOEL LAGORE, CFP®, AIF ®

The House of Representatives is putting forth a new tax plan that will likely increase taxes on both corporations as well as higher-income earners.An article on Rueters.com 1 states the current proposal is to increase corporate tax rates from21% to 26.5%,and to increase the highest personal tax bracket from37% to 39.6%. It would also increase the Capital GainsTax for single filers making above $400,000 and joint filers making above $450,000 from20% to 25%.Luckily (for the time being), it looks like the step-up in cost basis to the owner’s date of death will remain in place. It also appears that the EstateTax will likely stay intact at $11.7million, which can be doubled through somemoderately advanced estate planning. The tax proposal does not talkmuch about raising taxes on the majority of people who earn less than $400,000,but the final bill that Congress will vote on is far fromfinished.My guess is that they will try to get this new “Reconciliation”tax increase done by the end of 2021, so that the increases will be in place by 2022,and will also give the people who vote for it some distance between the passing of this legislation and the 2022mid-termelections. I completely understand the need to pay for some of the recent programs thatWashington has passed to try to keep our national debt from running away on us. I believe that tax increases, in the face of a very questionable economic growth environment,could lead to another round of layoffs and/ or pay cuts. In a time when we have a couple hundred thousand vehicles sitting in fields all over Flint andDetroit due to chip shortages and a very questionable supply chain, it feels like the failure of previous legislation has led us to a place of extreme uncertainty, to say the least. One argument for the tax increases is that,as AOC recently wore a dress emblazoned with “Tax the Rich”to the $30,000 a ticketMet Gala (the irony is not lost onme),would be that themajority of those who benefited fromCOVIDRelief bills and the stimulus packages of 2020 were people who owned things.And this benefit was exponentiallymore than those

who couldn’t afford to own things.The owners of stocks,bonds,businesses, real estate,bitcoin and gold have all benefited from themassive amounts of money printing. In fact,according to a graph from the Federal Reserve Bank of St.Louis, just over 35%of all the American dollars ever printed by the U.S.government had been printed during 2020.Think about that.Since 1776,35%of all money-printing was done in a ten-month period between February andDecember! 2 Truth and time will tell if this strategic “taxing of the rich’’leads to paying down of our current debt mess,or if it leads tomore poverty inAmerica started by a self-fulfilling prophecy of corporate layoffs, leading to slowing economic growth and some air being let out of the inflated asset balloon. I think nowmore than ever,ameeting with your financial advisor to evaluate your risk exposure in both the stock and bondmarkets will be essential to your financial andmental health over the next year. If you don’t have a financial advisor, the teamat OLV Investment Group would be happy to have a free consultation with you. HappyHalloween! Hopefully, the season won’t be too spooky ... Š 1 reuters.com/world/us/democrats-tax-plan-would-cut-bills-most-ameri cans-congressional-panel-2021-09-14/ (Tax information source) 2 netcoins.ca/blog/35-of-all-u-s-dollars-in-existence-have-been-printed last-in-10-months/ (Source for 35% of all money printing)

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Joel P. LaGore, Certified Financial Planner and partner with OLV Investment Group, focuses on money management. Joining the Down town Flint revitalization effort, his office is

located in The Durant at 607 E. Second Ave., Suite 100. Joel and his wife Sonya are raising two daughters in Flushing, where he enjoys philanthropic pursuits in his local community, in Flint at large and in Genesee County.

800.338.4586 olvinvest.com The Durant 607 E. 2nd Ave., Suite 100 Flint, MI 48502 jlagore@olvinvest.com Securities offered through Sigma Financial Corporation, member FINRA/SIPC. Investment advisory services offered through SPC, a registered investment advisor. OLV Investment Group is independent of Sigma Financial Corporation and SPC. *It is not possible to invest directly into an index. Past performance is no guarantee of future investment performance.This article is for informational purposes only and should not be construed as investment advice.

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