Wealth management executives posted mixed views on how the high-net-worth will be affected if the upcoming Midterm election results in a Democratic majority in both the House and Senate. Jamie McLaughlin, managing director with Lydian Wealth Management, said that the wealthy-friendly 2001 Estate and Gift Tax could be left unchanged in favor of more budget restrictions if the GOP loses Congressional control. "We are running a substantial budget deficit, and I think the position of the Democrats will be to exercise more fiscal discipline," McLaughlin said. "The way to do that is either raise taxes or spend less money, but I don't think they'll make any large tax cuts in favor of more budget constraints."
Rhona Vogel, ceo with family office Vogel Consulting, said her clients plan to make hay while the sun shines in the face of higher capital gains taxes should there be a shift in Congress. "I don't think there will be a full repeal of the Estate Tax in 2010. There will be some type of compromise, but we're taking advantage of the situation as long as we have it for clients," Vogel said.
Others predict that changes to the Estate Tax will be put on hold for two years until a Presidential election, and will in the meantime be used as a political football. John Dadakis, a partner with law firm Schiff Hardin, said any significant moves will hang in the balance of Nancy Pelosi's (D-Ca.) decision. But Democrats will unlikely make changes to the law before 2008, as the Republican Party would likely use this during the upcoming election to sway Democratic swing vote, he said. "They'll probably just take it off the table and wait for a new President," he said.