10 Points to Keep in Mind About Pending Legislation
As I’m sure you know, Washington is currently debating the infrastructure package and new safety net proposals. It’s a contentious debate.
I’d like to say that I can make an exact prediction of what the outcome will be, but obviously I cannot. However, as I have seen numerous legislative packages debated and passed, there are a few general points that I think you might keep in mind.
- Never completely rely on what the media says regarding predictions about legislative action. Wait until you read the final legislation that has been signed.
- Expect certain interest groups to get preferential treatment.
- Taxes will likely rise for corporations and high income/net worth individuals.
- Increased taxes do tend to impact economic growth.
- Don’t expect there to be much discussion about reducing the budget deficit; that can will be kicked down the road even farther.
- Any legislation that is passed today can easily be undone in a year, three years, five years etc.
- Portfolio strategy should take into account tax legislation. This is the reason why working with a qualified financial planner is so important.
- This current debate is not just about infrastructure but about dramatically increasing safety net provisions that increase the government’s role in the economy.
- It’s impossible to say when the effective date of legislation adjustments will be.
- There will be dramatic headlines, predictions of economic implosion, etc. We should just realize this is simply posturing and that legislation of some sort will get passed.
We will keep you posted as we learn more and are poised to adjust strategy as needed.