President Joe Biden’s American families plan and its impact on taxes

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CHATTANOOGA, Tennessee (WDEF) – President Joe Biden has unveiled a new $1.8 trillion spending and tax plan called the American Families Plan.

“We have good things that we want to happen but, there has to be a cost to it. We can’t have everything that we want and not expect to pay for it, it just may be a cost that we don’t want to pay,” said Vandergriff.

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Joe Biden’s plan consists of $1.8 trillion in new spending and tax credits aimed toward students, children, and families. The plan would cover child care for low-income families, free community college, and paid family leave.

“Up to $4000 per week that could be used for the things that you can’t plan for but that you need to make sure you take time for,” said Vandergriff.

John Vandergriff from Blue Ridge Wealth Planners said this is meant to help the average family recover financially from the Covid-19 pandemic.

“All the things that they’ve implemented in this plan are positive things for people. It’s just a matter of OK what’s it going to cost us to get there,” said Vandergriff.

A big question people have is who is going to pay for it? Vandergriff said it will tax the wealthy but, if passed it could also impact taxes on what people inherit.

“Parents pass down property to you and on the day of their death, their tax basis gets bumped up to the appraised value of that property at their death. So if you immediately sell it, you have no tax ramifications whatsoever. They’re talking about getting rid of that and keep it at the original tax basis what do you know if you’ve had parents who have had the same house for four decades or let’s say you had a family farm that’s been in the family for generations if you ever wanna have a situation To liquidate that money you better think about the tax impact of that,” said Vandergriff.

He said people can prepare for potential tax changes by having diversity in their assets.

“You know with investments there are ways to reposition money especially when it’s being donated. So just knowing what some of those options are, being able to talk to someone that is educated in taxes is very important,” said Vandergriff.