How Should I Handle a Tax Windfall That I Don't Want?

If getting a huge windfall from impending tax cuts has you feeling guilty, here are some options.

(Image credit: LIgorko)

Question: I’m a person blessed by considerable personal wealth, and I feel a moral dilemma about the prospect of getting an enormous financial benefit from tax cuts—on my current income and my estate after death—now being proposed by President Trump and the GOP Congress. I didn’t support Trump because I’m a fiscal conservative and a social liberal, and he is neither. I’m concerned that the proposed tax cuts—while generally beneficial to business competitiveness (especially the proposed corporate rate reduction)—will greatly exceed Trump’s planned spending cuts, swelling the federal debt. Any ideas on this?Answer:

I sympathize with your quandary. Yes, in the long run, this proposed simplifying of our arcane tax code—lower rates coupled with fewer deductions and credits—should be good for boosting economic growth and eventually raising total tax revenues. But in the near term, as you surmise, it will probably increase annual budget deficits because revenues will fall and spending cuts will be hard to achieve; Trump has many expensive plans in his pipeline.

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Knight Kiplinger
Editor Emeritus, Kiplinger

Knight came to Kiplinger in 1983, after 13 years in daily newspaper journalism, the last six as Washington bureau chief of the Ottaway Newspapers division of Dow Jones. A frequent speaker before business audiences, he has appeared on NPR, CNN, Fox and CNBC, among other networks. Knight contributes to the weekly Kiplinger Letter.