Alpha Financial in Financial-Planning.com
Alpha Financial in Financial-Planning.com
January 30, 2004
Sources speculate on the financial effects of a new Democratic president.
What do flip flops, rope-a-dope, and lollygaging all have in common? They’re all descriptions that critics have given to Sen. John Kerry’s political campaign.
Despite the name-calling that usually ensues with a presidential election, the Democratic Convention ended last night on high note with Kerry accepting a formal party nomination for presidency. Planners and experts alike commented that the Kerry’s speech was to rally supporters and convince those still on the fence to vote for him.
And rallying is what he did. "This was a chance for Kerry to be defined by his own merits not relative to the President," said B.J. Rudell, a political analyst and author of Only in New Hampshire published by Plaidswede Publishing Co. last fall.
One of Kerry’s more quotable lines came toward the end of his speech, "So much promise stretches before us. Americans have always reached for the impossible, looked to the next horizon, and asked: What if?" Yes, what if Kerry should win?
Planners wondered aloud about the future of the country’s large deficit, what effect raising taxes might have, and whether both candidates intend to make good on their promises.
Among the topics that Kerry did cover included:
Creating new incentives to revitalize manufacturing;
Investing in technology to create jobs;
Deterring companies from moving production overseas by closing loopholes in the tax code;
Cutting the deficit in half in four years;
Cutting middle class taxes;
Creating a more unified healthcare system.
However, the speech primarily focused on foreign policy rather than on domestic issues -- unusual for Democrats. "The economy has taken a back seat to foreign policy since 9/11 because no one had faces before. This is Kerry’s time to capitalize on foreign policy. If he doesn’t do it, he’s just a typical liberal Democrat in the eyes of many," Rudell said.
However, critics said that Kerry still has yet to be specific about what he intends to do once in office; last night’s speech didn’t enlighten them. "That hasn’t been answered for me through this convention. It’s been a great rally .. and they’ve laid down the [foundation] to build as much support as they can," said Troy Daum, a financial adviser with Wealth Analytics in San Diego.
In terms of winning the election, there isn’t as much pressure on Kerry, compared with President Bush.
"As the challenger he doesn’t need to run on a record of executive experience – a platform of overtly appeasing everybody. With so many Democrats just wanting Bush out of office there’s [also] less pressure on Kerry to try to work with ‘tax-and-spend’ liberals and deficit-cutting liberals," Rudell said. "The fact is Bush will not be able to seize the deficit reduction issue, so any mention of that by Kerry will be effective regardless of whether he actually intends to do that once in office."
Yet Kerry’s honeymoon would be shortlived if he indeed wins, because most likely he’ll face a Republican-controlled Congress -- making passing legislation extremely difficult.
Regardless, Kerry will have to act fast to show the public that he does plan to reduce the deficit and work for the middle class, notions that he’s mentioned all along. "He will need to signal to the financial markets that he does believe in free trade and in terms of tax issues, that he’s not a totally liberal Democrat," said Greg Valliere, chief political strategist for Schwab Capital Markets, in a March interview. He added that keeping the dividend tax cuts and possibly capital gains cuts would exemplify this.
Still, Kerry would want to repeal most other Bush’s tax cuts and possibly tackle more popular tax issues such as shelters, fraud, and abuse loopholes.
"My clientele is probably likely to be negatively affected by a Kerry administration," said James McGehee, of Alpha Financial Advisors in Charlotte, who serves affluent baby boomers with between $1.5 million and $2 million. "A lot of things are set to potentially sunset. We have a better chance of keeping those things in place with the Bush [administration]."
Depending on what Kerry adopted, planners would most likely have to redo estate plans, wills, and other estate tax avoidance techniques, like family partnerships. "And that's just on the transfer tax side," said Jeff Scroggin, a tax and estate planning attorney in Roswell, Ga.
"Every new President seems to want to fiddle with the tax code," he added. "If there are business tax changes, we will need to meet with our business clients. If there are income tax changes on investments, such as the loss of the capital gain brackets, we will need to meet with our investor clients. If the tax rates increase, we will need to meet with our high income clients."
On personal income side, "we may get personal tax benefits, like AMT relief," Scroggin said, noting that most of the previous tax changes have been leaned toward relief on investments and not necessarily earned income of middle class taxpayers.
But who knows? Like the markets, the election process is not completely predictable. At the very least, the American public should be in for an interesting ride over the next few months.
Kerry Discusses an Economic Plan, Briefly
Sources speculate on the financial effects of a new Democratic president.
By Laurie Kulikowski
What do flip flops, rope-a-dope, and lollygaging all have in common? They’re all descriptions that critics have given to Sen. John Kerry’s political campaign.
Despite the name-calling that usually ensues with a presidential election, the Democratic Convention ended last night on high note with Kerry accepting a formal party nomination for presidency. Planners and experts alike commented that the Kerry’s speech was to rally supporters and convince those still on the fence to vote for him.
And rallying is what he did. "This was a chance for Kerry to be defined by his own merits not relative to the President," said B.J. Rudell, a political analyst and author of Only in New Hampshire published by Plaidswede Publishing Co. last fall.
One of Kerry’s more quotable lines came toward the end of his speech, "So much promise stretches before us. Americans have always reached for the impossible, looked to the next horizon, and asked: What if?" Yes, what if Kerry should win?
Planners wondered aloud about the future of the country’s large deficit, what effect raising taxes might have, and whether both candidates intend to make good on their promises.
Among the topics that Kerry did cover included:
Creating new incentives to revitalize manufacturing;
Investing in technology to create jobs;
Deterring companies from moving production overseas by closing loopholes in the tax code;
Cutting the deficit in half in four years;
Cutting middle class taxes;
Creating a more unified healthcare system.
However, the speech primarily focused on foreign policy rather than on domestic issues -- unusual for Democrats. "The economy has taken a back seat to foreign policy since 9/11 because no one had faces before. This is Kerry’s time to capitalize on foreign policy. If he doesn’t do it, he’s just a typical liberal Democrat in the eyes of many," Rudell said.
However, critics said that Kerry still has yet to be specific about what he intends to do once in office; last night’s speech didn’t enlighten them. "That hasn’t been answered for me through this convention. It’s been a great rally .. and they’ve laid down the [foundation] to build as much support as they can," said Troy Daum, a financial adviser with Wealth Analytics in San Diego.
In terms of winning the election, there isn’t as much pressure on Kerry, compared with President Bush.
"As the challenger he doesn’t need to run on a record of executive experience – a platform of overtly appeasing everybody. With so many Democrats just wanting Bush out of office there’s [also] less pressure on Kerry to try to work with ‘tax-and-spend’ liberals and deficit-cutting liberals," Rudell said. "The fact is Bush will not be able to seize the deficit reduction issue, so any mention of that by Kerry will be effective regardless of whether he actually intends to do that once in office."
Yet Kerry’s honeymoon would be shortlived if he indeed wins, because most likely he’ll face a Republican-controlled Congress -- making passing legislation extremely difficult.
Regardless, Kerry will have to act fast to show the public that he does plan to reduce the deficit and work for the middle class, notions that he’s mentioned all along. "He will need to signal to the financial markets that he does believe in free trade and in terms of tax issues, that he’s not a totally liberal Democrat," said Greg Valliere, chief political strategist for Schwab Capital Markets, in a March interview. He added that keeping the dividend tax cuts and possibly capital gains cuts would exemplify this.
Still, Kerry would want to repeal most other Bush’s tax cuts and possibly tackle more popular tax issues such as shelters, fraud, and abuse loopholes.
"My clientele is probably likely to be negatively affected by a Kerry administration," said James McGehee, of Alpha Financial Advisors in Charlotte, who serves affluent baby boomers with between $1.5 million and $2 million. "A lot of things are set to potentially sunset. We have a better chance of keeping those things in place with the Bush [administration]."
Depending on what Kerry adopted, planners would most likely have to redo estate plans, wills, and other estate tax avoidance techniques, like family partnerships. "And that's just on the transfer tax side," said Jeff Scroggin, a tax and estate planning attorney in Roswell, Ga.
"Every new President seems to want to fiddle with the tax code," he added. "If there are business tax changes, we will need to meet with our business clients. If there are income tax changes on investments, such as the loss of the capital gain brackets, we will need to meet with our investor clients. If the tax rates increase, we will need to meet with our high income clients."
On personal income side, "we may get personal tax benefits, like AMT relief," Scroggin said, noting that most of the previous tax changes have been leaned toward relief on investments and not necessarily earned income of middle class taxpayers.
But who knows? Like the markets, the election process is not completely predictable. At the very least, the American public should be in for an interesting ride over the next few months.
