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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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Trends & Strategies

2022 Tax Season Spotlight: Strategies for This Year and Beyond

Explore strategies for optimizing your taxes for filing year 2022 and beyond.

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Trends & Strategies

Preparing for Potential State Wealth Taxes

Understand wealth planning strategies to prepare for potential new state taxes on wealth.

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Trends & Strategies

SECURE Act 2.0

Understand how the new legislation may affect your retirement planning.

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Trends & Strategies

To Roth or Not to Roth?

Learn why it may be an advantageous time to convert your retirement savings to a Roth IRA.

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Trends & Strategies

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 TAX POLICY CHANGES

Let Us Help You Plan for Change

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

Our approach to tax policy

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Plan Don't Predict
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Focus on Flexibility
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Dimensions of Diversification
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Plan Don't Predict
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Plan Don't Predict
Even if proposed changes to tax policy become law, their final forms remain uncertain. History tells us that such changes may not endure as economic and political environmental shift. That is why we believe the best strategies are built around your long-term goals rather than on predictions of potential policy changes.
"It is far better to plan for, but not attempt to predict potential policy changes."
Pam Lucina
Pam Lucina
Chief Fiduciary Officer and President of the Northern Trust Institute
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Focus on Flexibility
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Focus on Flexibility
The key to successfully navigating the unknown is an investment strategy and wealth plan that can adapt to changing circumstances and goals. By understanding the tax implications of every potential outcome, you are well-positioned to pivot, if needed, once there is clarity on the path forward.
"While there are flexible planning strategies that will allow you to adjust to changing circumstances, your long-term goals should ultimately determine your plan."
Paul Lee
Paul Lee
Chief Tax Strategist
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Dimensions of Diversification
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Dimensions of Diversification
The prospect of changing tax rates has investors rightfully concerned about their bottom line. In particular, increased capital gains taxes would meaningfully lower returns for taxable investors in taxable accounts. Certain portfolio diversification strategies can help, including careful analysis of after-tax optimization, asset location and whether to realize capital gains.
"Ultimately, the right mix of diversifies assets depends on your goals - the foundation upon which all investing and tax management decisions should rely."
Katie Nixon
Katie Nixon
Chief Investment Officer, Wealth Management

More Tax Insights

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

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Trends & Strategies

Understanding the Inflation Reduction Act

The new law's impact on Businesses and their Owners.

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Money Masterclass

Divorce & Real Estate: Avoiding a Tax Surprise

Align assets and goals with expert analysis.

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Money Masterclass

A Stress Test For Your Estate Plan

Are there surprises lurking in your plan?

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.

HOW LONG IT TAKES TO ENACT TAX CHANGES

Insights for Professional Advisors

Coordinated advice to help clients plan for change. 

In the News

Commentary from Northern Trust Institute experts in leading media outlets.

Barron’s PENTA

Future Returns: A Wealth Management Take on Biden's Tax Plan

Learn how changes to the tax code may affect wealthy individuals and families.

Family Wealth Report

Possible U.S. Tax Hikes Will Blunt Returns

Read about the impact of potential tax increases on asset returns.

The New York Times

With Higher Taxes Possible, Here’s What to Do Now

Find out if it is better to pay taxes now, when you know the rates.

BLOOMBERG TAX

Strategy Spotlight: Preparing for New Tax Laws

Learn wealth planning strategies to prepare for proposed tax policy changes.

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.

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