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Tax Reform…Not Just Yet

  |   Income Tax

While the framework for the Trump administration’s proposed tax overhaul bill has been released, the details are light and there are more questions than answers.  And, who will truly end up benefiting is not clear.

What We Do Know

Tax reform will not be a slam dunk.  As reported in this NPR article and others, the Republican party contends the middle class will benefit the most while Democrats argue it is the wealthy who will reap the rewards.  We are already seeing articles about the “rothification of retirement savings” and the “upending of the housing market” as a result of the proposed changes – both of which sound fairly ominous.  Not surprisingly, many  are wondering if changes to their financial plans are warranted due to the proposed reforms.   Back in February, Warren Buffet told CNBC that “Probably half the time [in] my adult life, I’ve had a president other than the one I voted for, but that’s never taken me out of stocks.  If you mix politics with your investment decisions you are making a big mistake.”  I agree with Mr. Buffet and would expand his comments beyond investment decisions to include all decisions related to your financial plan.

For a more granular look at the Republican Tax Plan and its potential impact, take a look at these charts, produced by the New York Times, that do a great job of breaking down the key elements of the proposal.

Republicans are hoping to get this reform through Congress by the end of the year.  We will keep you posted.

AUTHOR - Tammy Wener

As co-founder of RW Financial Planning, Tammy oversees the financial planning process for all clients and manages the day-to-day operations of the firm. She truly enjoys getting to know her clients and is not shy about asking questions. Tammy has 15+ years of experience in the financial planning and estate planning fields and has worked with a broad range of clients including: couples simultaneously planning for financial independence, caring for their parents, and saving for college; newly widowed and divorced women looking to become more financially literate; young couples just starting out; families juggling the demands of a child with special needs; and financially independent individuals and couples exploring “what comes next.”