14876
home,page-template,page-template-full_width,page-template-full_width-php,page,page-id-14876,bridge-core-2.4.1,ajax_fade,page_not_loaded,,qode-title-hidden,footer_responsive_adv,qode-theme-ver-22.6,qode-theme-bridge,wpb-js-composer js-comp-ver-6.4.1,vc_responsive

Join the virtual conference on Thursday, October 29th.

Speakers include top business managers with A-list clients, family offices that manage the finances of some of the wealthiest individuals in the world, and trusted advisors with decades of experience in counseling high profile clients.

✉️ Get the insider news

Trusted Advisor is a dedicated resource for advisors of high net worth clients in the Entertainment space. Catered towards business managers, CPAs, wealth managers, and family offices, the goal of the Trusted Advisor is to create a community of insider sources for the industry.

THIS WEEK

This week’s business management news:

The Tax Implications of the Election, Quibi – the short-form streaming service shuts down, Magic Johnson on partnering with Amazon to support small businesses, and Miller Kaplan on mobile security during the pandemic

 

Blue Wave vs a Red Tide: Tax Implications of the Election Results

As the Presidential election approaches, one of the most important issues that often arises in debates, discussions, and polls, is the content and the nature of each of the candidates’ tax plans.

 

Many Americans have already made their pick based on what they think each candidate would mean for their personal checking account and/or what they believe would be better for the American society as a whole.

 

And in this matter, President Trump and former Vice President Biden show drastic differences in their approach.

 

According to Chris Passmore, MBA, CPA and Managing Partner of Martini Akpovi Partners, a 60-person CPA firm with headquarters in Encino and offices in Valencia and in Glendale, there are three main differences between Trump’s and Biden’s approach.

 

1. Corporate Rate

The first one is the change in the corporate income tax rate which under President Trump and the Tax Cuts and Jobs Act of 2017, the corporate tax rate is 21%, which was a significant reduction from the prior amount of 35% under President Obama.

 

Former Vice President Biden, on the other hand, wants to increase that amount to 28%, which Passmore believes would affect a lot of companies.

 

“That’s a 7% increase in their income tax rate and that’s a tough one, that is going to significantly affect the bottom line of many businesses,” Passmore says. “The other change that Biden wants is to set a minimum 15% tax rate for all corporations regardless of the tax reductions or other credits they might have.”

 

2. Individual Income Tax Rate

The second key difference is a prospective change in the individual income tax rate for individuals with taxable income exceeding $400,000.

 

President Trump has mentioned that he wants to enact a 10% middle-class tax cut, but (as is often the case) has not given any details. Former Vice President Biden on the other hand, said he wants to increase the top marginal rate for the wealthiest households from the current 37% to 39.6.

 

3. Capital Gains

The third potential change or one that is significant at an individual level and not a business level is the treatment of capital gains, the tax that Americans generally pay on their investments.

 

Right now when a taxpayer sells an investment that they’ve held for over a year, the general rate they pay is 20% (+3.8% net investment income tax). Under the Biden plan, Reuters reported that for Americans who make over $1 million annually that rate will change to 39.6%. Biden’s campaign website also states that his tax plan includes “asking those making more than $1 million to pay the same rate on investment income that they do on their wages.

 

“Frankly, if Biden wins in November I wouldn’t be surprised if a large number of high income taxpayers sell their assets in Q4 when it’s still under the current rate of 20% to avoid that new rate of almost 40%,” Passmore says.

 

According to Passmore, President Trump and former Vice President Biden have different intents with both of their tax plans.

 

President Trump’s goal is to stimulate the economy through business, so his tax policy is favorable to business.

 

“His approach is that a rising tide lifts all boats and it will benefit everyone,” Passmore says.

 

Former Vice President Biden, Passmore says, has taken the approach of the more fair and equitable distribution of tax and a focus on social policy.

 

“By taxing the wealthy, he tries to make sure that the income gap between the highest and lowest earners is as small as possible.

 

Though each plan has a completely different goal, Passmore says that citizens have seen how changes in tax law can affect their checking account, more notably with the passing of the TCJA.

 

“Whether they think long-sighted and say ‘how will this affect the national debt’ and ‘how it will affect my kids’ is a different topic, but I think this is a very important issue for November.”

 

Bonus: A video where Chris Passmore talks about how the election will affect your tax bill. 


Quick Hits

📺 Quibi, the short-form streaming service announced this week that they are shutting down. This announcement comes only 6 months after the app became available.

 

🏀 Magic Johnson spoke with Business Insider about partnering with Amazon to support small businesses during the pandemic. Since May, Magic has pledged to donate a total of $325 million in loans to minority-owned small businesses through his life insurance company EquiTrust Life Insurance.

 

🔑 Miller Kaplan reported this week on the security of mobile devices during the pandemic. Threats to mobile device security include theft and hacking. Miller Kaplan offers 5 protective measures to help mitigate the impact of these issues.

GET THE NEWS EVERY WEEK
Live Streams

Business Manager Mark Pariser in Discussion with Malcolm McNeil

Nov 4 at 2 PM PT: Join us for the 1-hour discussion with Mark Pariser, Partner at Dunn, Pariser & Peyrot, and Malcolm McNeil, Partner at Arent Fox in Los Angeles. This edition of Insider Sources will dive deep into how business managers work with clients through Estate Planning issues, and how business management firms themselves can develop their own succession plans.

LATEST STORIES
This week's business management news: The Tax Implications of the Election, Quibi - the short-form streaming service shuts down, Magic Read more


This week's business management news: The New Jet Set: The Rise of Concierge Transportation, Forbes reports on Family Office Software Read more


Social Engineering scams on the rise, Hollywood Reporter Names Top Business Managers of 2020, NBA teams face different tax rates, Read more


Keeping Medical Bills in Check, Disney to cut 28,000 jobs, Department of Labor announces revisions to paid sick and family Read more


📰 This week: • The Great Business Management Roll-Up • Joe McLean on protecting athlete wealth • Miller Kaplan on avoiding social Read more


Follow by Email
LinkedIn
Share