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Kim Butler
President

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX



BIOGRAPHY:
I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Affluent Households Brace for Tax Increases

Author(s): 
Donald Liebenson
The closer the fiscal cliff deadline approaches, the more relevant to Affluent households the last recorded words of Captain Billy Tyne of the Andrea Gail, the ill-fated boat caught in The Perfect Storm, become: “She’s comin’ on, boys, and she’s comin’ on strong.”
If no deal occurs, it's estimated that 80 to 90 percent of Americans would see some form of tax increase next year. Analysts estimate that taxes would increase by an average of $3,500 per household, with middle-income households seeing an average increase of almost $2,000. The Congressional Budget Office cautions the likelihood that the country will slip back into recession should a solution not be reached on the tax cuts and mandatory spending cuts scheduled to take effect at the end of the year.
Affluent households surveyed in November by Millionaire Corner are bracing themselves for this anything but perfect economic storm. Eight-six percent said they believe their taxes are going to increase. This sentiment increases with wealth level, with 92 percent of Millionaires expecting to be hit with a tax hike.
The stage is set for a Capra-esque uplifting ending out of It’s a Wonderful Life, but President Obama’s Christmas wish that a bipartisan solution will be found before the holidays were dealt a setback Wednesday when fiscal cliff talks broke down. "No substantive progress has been made in the talks between the White House and the House over the last two weeks," House Speaker John Boehner, R-Ohio, told reporters.
With expected tax increases comin’ on strong, how are affluent household planning to react?  Millionaires are taking a more pro-active approach than the least wealthy households we surveyed. Thirty-eight percent said they will look for tax-advantaged investment opportunities, compared with just 7 percent of households with a net worth of less than $100,000.
Similarly, 16 percent of Millionaires said they would reallocate their assets compared with 10 percent of in investors with less than $100,000.
These investors are more likely than Millionaires to adjust financial habits. One-quarter said they would save more vs. 14 percent of Millionaires, while 70.5 percent (vs. 45 percent of Millionaires) said they would spend less.
The least wealthy respondents were also more likely to say they would be compelled to dip into their savings compared with 12.2 percent of Millionaires.