tax doomsday

When are the tax riots going to begin?

Remember this headline?  71 STUDENTS ARRESTED IN TUITION PROTEST ON RUTGERS’ HOME CAMPUS (Philadelphia Inquirer – May 13, 1989)

“Rutgers University students and police clashed yesterday when officers moved to break up a sit-in at the dean’s office by students protesting 13 percent tuition increases…”

Yes, Rutgers in 1989 raised their tuition by 13% and 71 students rioted and got arrested.

On January 1, 2013, tax rates are scheduled to increase as follows:

  • Dividends by up to 190%
  • Capital gains by up to 59%
  • Income tax by up to 13%
  • Estate tax by around 290% (for someone with approximately $10 million in assets)

 

You would think that people might be upset.  Sit-ins, no.  But, media coverage…where is it?!

Of course, those in the fundraising arena, planned giving in particular, need to be ready for what might be the most favorable tax-incentivized atmosphere for planned gifts since the late 1990s.

By the way, the tuition increase at Rutgers in 1989 amounted to a $296 bump that brought the Fall 1989 in-state tuition to $2,576!  Boy have times changed.

New American Holiday: 1/1/2013 – Tax Doomsday

Did you know that December 31, 2012 is not only New Year’s eve this year, it is also the eve of tax doomsday?

I already started mentioning this oncoming situation in February, so check out my overview of the issues:  http://theplannedgivingblog.wordpress.com/2012/02/05/2012-incomeestategift-tax-update/.

For those who want more than  just an overview, check out this excellent article on the Planned Giving Design Center: http://nyct.pgdc.com/pgdc/perfect-storm-prospective-expiration-bush-tax-cuts. What I love about the article is the list of 17 negative tax consequences that will kick in on January 1, 2013 should Congress and the President not act on this.

In truth, Congress will do something – either a partial or whole fix or a “kick the can” temporary solution.  What fundraisers and planned giving officers in particular need to be aware of is the opportunity that many older supporters should be seeing their estate planning attorneys before the end of the year.

What can you do? Offer tax/estate planning update seminars, send email alerts and other educational pieces, stir up the pot.  People don’t change their estate plans often – if this is the year that frightening tax doomsday scenarios push your prospects to revisit their plans, you want them remembering your organization in those conversations.