As of the writing of this column, we are bearing down on a U.S. presidential election that will usher in a new administration. This will likely mean a new Treasury Secretary, IRS Commissioner, Attorney General, and politically appointed subordinates in the areas of tax policy and tax enforcement. The make-up of Congress further adds to the complexity and uncertainty of upcoming tax policy. As legal practitioners, we can generally advise clients concerning “good news” and “bad news,” but uncertainty is another matter. Of course our tax law progresses through such political uncertainty regularly, but change is the one constant. Regardless of the outcome of the election, various campaign proposals will be made and, ultimately, new legislation is introduced. A few areas to pay particular attention to if clients desire to make contingent plans are as follows:
- Marginal tax rates. Expect continued discussion and perhaps concrete proposals to raise or lower the top marginal income tax rates. The marginal tax rates may flatten, coupled with the phase-out or elimination of various tax deductions or rate credits. Those proposals may be pitched as tax simplification. Likely areas of focus will be further phase-outs or limitation of mortgage interest, property taxes, and even charitable contributions.
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