In an interview with U.S. News & World Report, Philip Tortorich, a partner in the firm’s Trusts and Estates Practice, says that the Obama administration will likely increase capital-gains taxes from 15 percent to 20 percent, or possibly as high as 28 percent. In addition, the highest income tax rate is expected to go up from 35 percent to 39.6 percent. Mr. Tortorich says that high-net-worth individuals are trying to lock in their capital gains at the current rate before the increases take effect. “If they can incur capital gains now, they think they'll be better off in the long run, which goes against conventional wisdom, which is to wait and defer taxes as long as possible,” he says. The interview was also picked up by Yahoo! Finance. (“Wealthy Brace for Obama Taxes,” November 11, 2008)
Mr. Tortorich still cautions, however, against being too hasty to make changes. In an Investment News article, he says that even though capital gains taxes may increase, waiting is usually the better approach. “If we can defer capital gain pickup, that's historically been the best advice,” he says. (“Advisers to Clients: Prepare for Likely Tax Increases,” November 17, 2008)
In a related article on FOXBusiness.com, Mr. Tortorich says that most of Obama’s tax policies will likely be enacted and expects that this will create more restrictions for high-income taxpayers. “The things that had been done in the past—whether they are perceived loopholes or actual loopholes—[are] going to be reduced dramatically under an Obama presidency,” he says. (“Planning Now to Avoid Possible Obama Tax Hikes Later,” November 13, 2008)
Mr. Tortorich was also quoted in an article on tax increases in Financial Planning. “The general view of Obama's policies with a Democratic Congress in power is one of fewer exemptions and higher tax rates for high-net-worth individuals and business owners,” he says. (“Taxes: Going Up?” December 2008)
In an article in Crain’s Detroit Business, Mr. Tortorich says that as a result of the anticipated policy changes for next year, clients will also be looking to minimize estate taxes by the end of 2008. (“Sunset on estate tax unlikely in Obama administration,” November 10, 2008)