Tax Policy Resource Center

Research-based insights at the intersection of changing tax policy and managing complex wealth from The Northern Trust Institute

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Navigate to Navigating Possible Tax Policy Changes
Wealth

Navigating Possible Tax Policy Changes

Plan for uncertainty by incorporating flexibility to accommodate changing policy.

Navigate to A Stress Test For Your Estate Plan
Family

A Stress Test For Your Estate Plan

Are there surprises lurking in your plan?

Navigate to The Capital Gains Dilemma
Wealth

The Capital Gains Dilemma

With changes to capital gains on the horizon, consider these strategies to optimize your plan.

Navigate to A Complicated Equation: State and Local Tax Proposals and the SALT Deduction
Wealth

A Complicated Equation: State and Local Tax Proposals and the SALT Deduction

With federal, state and local tax policies all in flux, learn what is driving the debate.

Navigate to Changing Tax Policy: Plan, Don’t Predict
Video

Changing Tax Policy: Plan, Don’t Predict

Learn our outlook for the most likely tax changes and how to prepare your plan for change.

Likelihood of Proposed Tax Policy Changes

Now that the House Ways and Means Committee has outlined its proposed tax plan to fund the $3.5 trillion reconciliation spending program, our experts break down the likelihood of proposed changes taking effect.

Navigate Tax Policy Changes

Let Us Help You Plan for Change

Our advisors can recommend strategies that have proven most effective in times of uncertainty.

Latest Insights

Prepare your plan for change with our latest advice on tax policy and complex wealth.

Did you know?

  • 3 – Attempts to repeal step-up in basis

    • The step-up in basis of inherited assets has been part of the Internal Revenue Code for more than a century, with three attempts to repeal or eliminate it ultimately proving short-lived.1

  • 7th – Highest OECD country for top corporate tax rate

    • The proposed increase to top corporate tax rate would move the U.S. to tie with New Zealand for #7 out of 37 OECD countries with the highest statutory corporate tax rates.2

  • 500% – Increase in taxable estate tax filings

    • If the estate tax exemption is lowered to $3.5M, the number of taxable estate tax filings would jump from an estimated 2,700 in 2021 to 16,600 in 2022.3

  • 10th – Highest country for debt to GDP%

    • According to International Monetary Fund data, the U.S. is expected to rank #10 of nearly 200 countries in 2026 for government debt as a percent of GDP if taxes are not raised.4

  • 1.4% – Reduction in after-tax returns

    • If the tax bills are enacted as proposed, expected after-tax returns for a moderate risk portfolio could be reduced by 1.4%.5

  • $11.7M – GST Exemption in 2021

    • Starting as a $250K exclusion in 1976, and increased to $1M in 1986, the GST Exemption has increased to $11.7M. It is scheduled to be reduced to $5M in 2026, or sooner, pending proposed legislation.

Tax Insights for Business Owners

Advice to navigate your business through an uncertain tax policy future.

How long it takes to enact tax changes

Insights for Professional Advisors

Coordinated advice to help clients plan for change.

LET US HELP YOU PLAN FOR CHANGE

Guided by the Northern Trust Institute’s evidence-based approach, our advisors can recommend strategies that have proven most effective in times of uncertainty. Request a meeting to prepare your plan for potential tax policy changes.

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Disclosures

1. The step-up rule dates back to 1913 with three efforts to repeal or eliminate it: The first was with The Tax Reform Act of 1976, but the provision was repealed before it could take effect. The second was with the Economic Growth and Tax Relief Reconciliation Act of 2001, but the provision was only effective for one year. The third attempt was a proposal from the Obama administration, which was never realized. Sources: DeLaney Thomas, K., Schmalbeck, R. and Soled, J. Advocating a Carryover Tax Basis Regime, 2017, University of North Carolina School of Law, as retrieved from https://scholarship.law.unc.edu/cgi/viewcontent.cgi?article=1298&context=faculty_publications on April 1, 2021 and The Tax Policy Center of the Urban Institute and Brooking Institution, as retrieved from https://www.taxpolicycenter.org/briefing-book/what-difference-between-carryover-basis-and-step-basis#:~:text=The%20Economic%20Growth%20and%20Tax,additional%20unrealized%20gains%20carried%20over on April 1, 2021.

2. Organisation for Economic Co-operation and Development. Retrieved at https://stats.oecd.org/Index.aspx?QueryId=78166 on April 7, 2021. As measured by national statutory tax rates, which do not include sub-national tax rates or deductions for sub-national tax rates.

3. Urban-Brookings Tax Policy Center Microsimulation Model (version 0921-1). Retrieved from https://www.taxpolicycenter.org/model-estimates/baseline-estate-tax-tables-dec-2020/t20-0258-estate-tax-returns-and-liability-under on April 10, 2021.

4. International Monetary Fund (IMF) World Economic Outlook (April 2021). Retrieved from https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD as of April 7, 2021

5. The Northern Trust Institute Research of tax-optimized strategic asset allocation models