Put Politics Aside and Consider Trump’s Tax Plan a Gift
No matter your political party, there could be some opportunities ahead for you to reduce your tax bill. Be ready to take advantage of them.
The tax plan President Donald Trump unveiled back in April was short on details but long on potential for retirees and pre-retirees.
Trump is also proposing the elimination of the alternative minimum tax, which is typically leveled against retirees or pre-retirees in northeastern states where state and property taxes are high. He wants to get rid of the estate tax altogether, which would allow certain high-net-worth taxpayers to move assets into trusts without any tax liability.
Even the rare individual whose taxes would increase under Trump might be able to override the negative implications with proper planning.
It doesn’t matter if you’re a Republican or a Democrat — if Trump makes these changes stick, even for a little while, you should be prepared to take advantage. Consider this endorsement of tax planning by Judge Learned Hand in 1935:
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the Treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
This is what we do at our investment advisory firm every day. As a former tax attorney, I make it my mission to take fair advantage of tax breaks through detailed tax planning so my clients can retire with more of the nest egg they worked so hard to build. Essentially, we allow Uncle Sam to subsidize our client’s retirement by paying fewer taxes so our clients can take home more of their hard-earned savings.
Make no mistake, this tax plan could be a retirement game-changer — but you and your tax professional and financial adviser have to know how to make the most of it.
If you like President Trump, think of it as a promise fulfilled; if you don’t, consider it an olive branch. But regardless of whether you’re a Republican or Democrat, don’t look this gift horse in the mouth.
Kim Franke-Folstad contributed to this article.
About the Author
Pete A. Lang, Investment Adviser Representative
President, Lang Capital
Pete A. Lang is an Investment Adviser Representative and president of Lang Capital. Now retired from the public practice of law and accounting after 20 years, Pete specializes in assisting his clients with investment, retirement and tax-planning strategies.