10 Points to Keep in Mind About Pending Legislation
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.
10 Thoughts
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- 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.
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We will keep you posted as we learn more and are poised to adjust strategy as needed.
