Tags: taxes | tax cuts

It's Time to Protect Your Assets From Rising Taxes

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Monday, 08 Aug 2011 08:13 AM Current | Bio | Archive

Your taxes are going to up. The rates set under President Bush are going to expire, and there does not seem to the political will in Washington to change course.

There seems to me to be an endless stream of investment gurus popping out of the media woodwork selling their "expertise" to a still gullible investment public.

These are the same guys, more or less, that sold you the high tech stocks that lost most people a significant part of their portfolio when the Clinton-era tech boom crashed and burned.

And, do you remember the hype about the real estate derivatives? How much of your portfolio was lost on that market crash which hasn't yet gone away?

Let me ask you, did any of your investment advisers and money or mutual fund managers (besides charging big fees for losing a lot of value for you), do anything for you about tax-efficient investing or protecting your investments from lawsuits and divorce.

Can we all agree that the current president's and Congress’ complete and utter failure to deal with tax reform, debt and budget reform, and legal liability reform is — well — staggering. 

They had the opportunity of a lifetime to make a real impact and change the course of the United States from going down to going up. The President was AWOL, virtually irrelevant to the debate, and the long-time congressional political establishment played charades, appointed yet another committee, and got out of town as fast as possible so they can work on their re-election fundraising.

What does this really mean to you? Clearly, you are on your own.

There is not much you can do about the debt of the United States. Nor the U.S. budget. Tort reform is but a fleeting thought. Almost like mist in the night.

Healthcare, the useless sacrifice of our servicemen in the military in wars that have no actually enemy or definable victory (terrorism is a tactic not a defeatable enemy), the threat of a nuclear holocaust because of Iran, the security of Israel, energy independence, the deliberate devaluation and value of the U.S. dollar, and a job-creating environment all were too easily ignored in the bipartisan wheeling and dealing by Congress.

I would normally say that what we have just witnessed was smoke and mirrors. This time all we got from Congress was smoke and not even the mirrors. The president did not even bother with even contributing some smoke.

Congress was too busy making another bipartisan deal to lead. The president's input was non-existent.Except for Marco Rubio and other tea party stalwarts, the United States is a leaderless country, at best.

With this said, what you can do is take your own financial future and security in your hands and take the necessary action steps to preserve your economic well-being and that of your family.

President George W. Bush's actual reduction of the tax burden on taxpayers is about to shortly end. Tax rates on earned income, long-term capital gains, and dividends are all going to go up as the lower marginal rates expire because of the "sunset" provisions built into the law.

Do not forget all this tax complexity and burden was agreed to in the bipartisan sausage-making that passes in Washington, D.C. for a legislative process.

While I do not give investment advice, I do know taxes. Planning for investments, or business financing for that matter, in a high tax environment is going to take a lot of coordination between tax advisers, investment decision makers, and you.

Some things that have been mentioned to me are investments in solid-earning but not dividend-paying, equities, well researched tax-exempt munis, investing through annuities and life insurance, and tax-exempt retirement plans. 

For those involved in multi-national businesses, there are opportunities to structure your business affairs so as to create a tax-deferred environment for earning and profits. Or at least some. Tax planning through bi-lateral tax treaties is complicated but may be worth the expense.

Estate and gift tax planning is front and center. The Congressional Joint Committee On Tax issued a report about five years ago that pointed out that the estate tax was a net revenue loser for the Treasury. Regardless, it looks like it is not going away anytime soon.

With the estate tax exemption at $5 million ($10 million for a married couple) until the end of 2012, now is the time for some serious estate-tax minimization planning. Dynasty trusts, in domestic or offshore asset protection jurisdictions, should be considered. In fact, there are any number of estate planning structures that will be very usable for income tax and wealth protection at the same time.

It is your hands now. Accept the fact that Congress is a failure.That the president is even a bigger failure. Take control of your financial life and not leave it up to supposedly prestigious money or fund managers. 

If you expect to have taxable income, the Treasury is going take a lot more of it if you let them. Every dollar to the Treasury is a dollar less for you and your family.

It's time for you to protect your investments and income from rising taxes. Good action is better than a good excuse.

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Kleinfeld
Your taxes are going to up. The rates set under President Bush are going to expire, and there does not seem to the political will in Washington to change course.There seems to me to be an endless stream of investment gurus popping out of the media woodwork selling their ...
taxes,tax cuts
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2011-13-08
Monday, 08 Aug 2011 08:13 AM
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