Jul 1, 2010 12:00 PM

, By Brandon Buckingham & Michael Leaser

Given the likelihood of increased income tax rates, it's important to review financial, retirement and estate-planning objectives with your clients

By Brandon Buckingham & Michael Leaser

For decades, the United States had a top marginal tax rate as high as 50, 70 and even 90 percent.¹ As a matter of fact, for the past 50 years there have only been five years (1988 to 1992) when the top marginal tax rate was less than the current 35 percent tax rate. Considering the cost of the stimulus, soaring U.S. government debt, a $3.72 trillion federal budget, a projected record-breaking $1.6 trillion deficit, expiring tax cuts passed in 2001 and 2003, and proposed tax legislation, income tax rates are sure to increase. As a result, every taxpayer will need to consult with their financial and tax advisors to implement investment and tax strategies that benefit from a rising tax environment.

President George W. Bush implemented several tax cuts with the passage of both the Economic Growth Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). These laws contained sunset provisions that take effect at the end of 2010 and will require new legislation to continue those tax cuts. The uncertainty of the future tax environment makes it difficult to plan properly.