An important part of the current national economic debate is tax policy. This debate affects not only what you pay every April, 15th but what services you can expect from the government and how income earned from investments is taxed.
One of the biggest aspects of the debate is the Capital Gains Tax. This is the tax rate at which most investment income is taxed. It is currently around 15% (this is the most cited number though different situations can lead to variable rates). Some people claim raising this tax will make the tax system more equitable because mainly wealthy people pay this tax and it is much lower than the highest income tax bracket. Other say this discourages investments and penalizes the successful. Both theories have merit and it will be up to voters to decide come November. Make sure you discuss capital gains taxes with a wealth manger because they way investments are timed and organized affects the rate at which you are taxed. A wealth manager will also be able to help you understand any changes to the system that may occur in the next election cycle.
A wealth manager can also help you find tax breaks for your investments and other income. It is your job as a voter to help decide which tax policy is most favorable but it’s a wealth manager’s job to get you the highest return regardless of tax policy.
Please consult a qualified tax advisor for tax related questions.