Two major financial proposals have been made in Washington in the past couple of weeks that could affect taxpayers, but Mitch Drossman, national director of Wealth Planning Strategies Group at U.S. Trust, says advisors and clients should not panic.

“It is a mid-term election year for Congress and little is probably going to happen right now,” Drossman predicts. Although both the proposed revenue changes in President Obama’s budget proposal and a tax code overhaul proposed by House Ways and Means Committee Chair Dave Camp could make major changes to people’s tax bills, probably nothing significant will happen, he says.

“The role of the financial advisor right now is to keep clients from walking off the edge of a cliff,” Drossman says. “The budget proposal and tax code reform proposal have to be put in context. President Obama’s budget contains ideas that have been floated before. And Dave Camp is stepping down from chairman of Ways and Means. So no one should panic about any immediate changes.”

An example of the changes that would affect investors is the proposal to tax income from municipal bonds, Drossman says. Also, the idea of imposing self-employment taxes on all S Corporation distributions is being floated. In addition, the “Buffett rule” that would impose higher taxes on the ultra-wealthy is being proposed.

“The president’s budget has about 175 different revenue proposals. The tax code overhaul has many more, starting with reducing the seven tax brackets to three,” Drossman says. These and other proposals could have an enormous effect on taxpayers.

“But none of this is going anywhere in a mid-term election year, [which is why] none of the proposals have generated a lot of news coverage or talk,” he says.