We are living in a time of increasing political uncertainty. In 2017, Congress cut corporate and individual tax rates dramatically. Former Vice President Joe Biden now campaigns on a platform to increase taxes. He proposes the following:

• Revert the top individual income tax rate for taxable incomes above $400,000 from 37% to 39.6%.

• Tax long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6% on income above $1 million and eliminate the step-up in basis for capital gains taxation at death.

• Cap tax benefits for itemized deductions.

• Phase out the qualified business income deduction (Section 199A) for filers with taxable income above $400,000.

• Increase the corporate income tax rate from 21% to 28%.

• Create a minimum tax on corporations with book profits of $100 million or higher.

• Double the tax rate on Global Intangible Low Tax Income (GILTI) earned by foreign subsidiaries of U.S. firms from 10.5% to 21%.

Impose a 12.4% Old-Age, Survivors and Disability Insurance (Social Security) payroll tax on income earned above $400,000.

What can be done to plan for these potential changes? Some tax advisors suggest selling appreciated assets in 2020 for fear that tax rates will increase in 2021. Warren Buffett once noted, however, that taxes should not drive investing decisions. If you have made a good investment, why exit the investment and put your money in cash, for fear that you might pay more taxes on investment gains? Instead, Buffet has established a tax efficient structure with Berkshire Hathaway to make long-term investments. Its operating companies distribute profits to their parent tax-free; the parent then reallocates capital where it is most needed. You too can plan for proposed tax increases by creating a flexible, tax-efficient plan to grow and reallocate savings. Although every individual has different circumstances, below are some general strategies to do so:

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