Advisers see tax hike part of cliff fix

Deduction reductions are on the horizon, according to many

Dec 2, 2012 @ 12:01 am

By Darla Mercado

Financial advisers expect that any fiscal cliff deal will include steeper taxes for the wealthy.

The issue has been top-of-mind since President Barack Obama won re-election. Tensions have been rising as congressional members of both parties reportedly are strengthening their respective positions on entitlements and taxes.


Financial advisers got their chance to chime in last week as the Financial Services Institute Inc. encouraged its 35,000 adviser members to reach out to lawmakers and urge them to come to a resolution, according to spokesman Chris Paulitz.

Nevertheless, advisers generally think that lawmakers are on the right track to avert the fiscal cliff. The FSI surveyed 2,454 of its adviser members in November and found that 79% predict that a deal will be reached before Jan. 1.

Advisers also think that such a plan will include some bad news for individuals making at least $200,000 a year and families earning at least $250,000. Seventy-two percent of the surveyed advisers predicted not only higher marginal tax rates for those people but also curbs on deductions.


In addition, 70% of advisers said that higher earners shouldn't be taxed at a higher rate, and nearly the same percentage said that they think those higher taxes ultimately would hurt saving and investing. Although 58% of participants want to keep the capital gains tax at 15%, about 30% are amenable to an increase to 20%.

Ninety percent said they think any deal should include reforms for both the tax code and entitlement programs, such as Medicare. Twitter: @darla_mercado


What do you think?

View comments

Recommended for you

Featured video


Behind the scenes of InvestmentNews' Icons & Innovators

Editor Fred Gabriel and special projects editor Liz Skinner discuss how the editorial team selected the final lineup of honorees.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Meet our 2017 Icons & Innovators

InvestmentNews honors 20 visionaries two icons and 18 innovators who are lifting the financial advice profession to new heights.

RIAs struggle to keep clients grounded amid stock market euphoria

With equities at record levels, financial advisers are confronted with realities of greed and fear.

Regulators showing renewed interest in cracking down on investment fees

SEC, Finra targeting high-fee share classes, 12b-1 fees and failure to give sales load discounts and waivers to investors.

Tax update: Brady says sales tax deduction in final bill

Taxpayers will be able to deduct state income taxes or state sales taxes in addition to property levies — up to a $10,000 cap.

Complexity of new indexed annuities causing concern

Insurers are using 'hybrid' indices as a way to differentiate themselves, but critics contend the products are less transparent, more confusing and don't add financial benefit.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print