A wide variety of proposals have emerged as the current crop of presidential candidates propose changes to tax laws, and many of these policies involve raising the taxes of high-net-worth clients.

“While President Trump’s proposal to reduce the 22% marginal rate to 15% is an attempt to cut taxes for the middle class, the tax proposals of the leading Democrat candidates each set out tax increases, some more drastic than others,” said James G. McGrory, a CPA and shareholder with Drucker & Scaccetti in Philadelphia.

Among the latter are proposals to enact a wealth tax, raise the highest tax bracket from 37% to 39.6% and hike capital gains and corporate tax rates.

“Election years are a very noisy and distracting time when trying to consider effective tax planning,” McGrory said. “What is very clear is that if one of the Democrat candidates wins the presidency, the tax bill for wealthy clients will increase.”

He noted that clients worry about proposed reductions in the estate tax exemption and elimination of the step-up in basis for inherited property.

“Very generally, there’s a focus on everything from increased tax rates for top income earners to reversing the tax cuts on the wealthy to increasing corporate tax rates to adjusting the estate tax regime to a full overhaul of the estate tax system,” said Steven Wittenberg, director of legacy planning at SEI’s private wealth management group in Oaks, Pa. “Trump, on the other hand, appears to be in a stay-the-course mode ... but looking for part two of a tax cut.”

“Currently, Joe Biden is the most moderate Democratic candidate on tax policy, and he’s proposing to raise taxes by $3.2 trillion over 10 years, with higher rates for corporations and individuals,” said Stein Olavsrud, an executive vice president and portfolio manager at FBB Capital Partners in Bethesda, Md.

Biden is proposing to raise the top corporate tax rate from 21% to 28%, hike capital gains taxes, close popular tax breaks and raise the top individual rate from 37% to the old top rate of 39.6%. “This contrasts with some who want a 70% top individual rate. These ideas would likely stall in the Senate,” Olavsrud said. “But investors should pay close attention. It’s important to give close consideration to the House and Senate races as well. The presidential candidates certainly have grand plans, but the ability to implement those plans will rely on passing legislation, which can be a very steep wall.”

The candidates’ wealth-tax proposals have “significant information gaps” and are far from becoming law, said Neil T. Kawashima, a Chicago-based private client partner with the Washington, D.C., law firm of McDermott Will & Emery. “Individuals and families impacted by these proposals hold assets that likely include closely held business interests, real estate, artwork and other collectibles and other difficult-to-value items.”

“It’s not clear if the candidates’ proposals are constitutional. Would they make it through the inevitable court challenges?” said Elyse G. Kirschner, a New York-based private client partner with McDermott Will & Emery.

“We reassure clients that the current estate tax laws are set to sunset at the end of 2025, and that historically there’s never been a retroactive estate law change,” said Wittenberg from SEI. “We explain that the worst-case scenario of a retroactive law change is that you enact a plan in hopes of a tax savings opportunity and it’s clawed back, leaving you in the same position as you are now.”