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.
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