Chart: Prepare now for continued tax changes

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Investors may be concerned with changes in tax rates. But our latest chart reminds us that rates have not remained constant over time.

 

 

  • The Biden administration has recently made proposals for higher maximum income tax and corporate tax rates, although they’re still relatively low from a historical perspective. The proposed capital gains rate would be a new high, but it would apply to a limited universe of high-income taxpayers.*

 

  •  Tax rates haven’t stayed constant over time. Over the last 60 years:

    • The capital gains tax rate has changed 18 times — reduced eight times and increased 10 times.**

    • The income tax rate has changed 16 times — reduced 11 times and increased five times.

    • The corporate tax rate has changed 10 times — reduced eight times and increased two times.

 

  • While there’s still a lot of uncertainty, it’s important for advisors and their clients to start the discussion so investors understand how tax changes could impact their investment goals.

 

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