Making money
Tax advisers are in a “wait-and-see
game” to determine which of many
proposals from the Biden administra-
tion will actually become law, said Ben
Steverman in Bloomberg.com. “Presi-
dent Biden campaigned on a variety
of tax hikes and other changes aimed
at squeezing trillions of dollars from
corporations and Americans earning
more than $400,000.” After the Dem-
ocrats gained control of the Senate, the
chances of fulfilling “at least some of
those promises” improved. High on
the agenda are changes in capital gains
taxes and the estate and gift tax ex-
emption, which Republicans doubled “to $11.7 million for indi-
viduals and $23.4 million for couples in 2021.” Any “retroactive
tax changes” that become effective as of the start of 2021 could
cost some wealthy taxpayers millions of dollars.Don’t expect big changes yet, said Jim Tankersley in The New
York Times. Biden’s treasury secretary, Janet Yellen, said last
week that “the president would hold off on reversing any part
of the 2017 tax law until later in the recovery.” Most likely,
tax measures would get folded into “a large infrastructure
package.” Biden could actually “end up cementing as much
of Trump’s tax cuts as he rolls back,” particularly for middle-
income families, though businesses may see the corporate tax
rate going up to 28 percent from 21 percent. Congress mightalso limit “a deduction for high earn-
ers who run companies that are not
organized as corporations.”That would affect more people than
you might think, said Ed Finn in The
Wall Street Journal. “About 30 mil-
lion owners of businesses, most of
them very small outfits,” used the
2017 tax law’s 20 percent deduc-
tion on qualified business income.
Changes in that provision could
mean higher taxes for many small
companies. Congress “would be
smart to make sure that only the very
largest of these 30 million businesses—say, those with more than
$2.5 million in annual profit—lose this deduction.”The biggest tax concern for this year may be “what happens to
the capital gains tax rate,” said Paul Sullivan in The New York
Times. That rate, currently at 20 percent, could jump to “the
same level as the tax on income,” which for the highest earners
would be 37 percent. Additionally, the strategy of “holding on
to securities until you die and not paying any capital gains tax”
could come to an end if the Biden administration required heirs
to “pay taxes on those gains when they sell the assets.” Instead
of selling, some investors may want to consider borrowing
against their portfolio. “There would be interest on the loan, but
it would be far less than the tax bill.”Taxes: Capital gains, business levies could see increase
BUSINESS 33
Ge
tty
Could the 2017 tax cuts get rolled back?College costs and your child’s GPA
“When should you tell your child that their
high school grades might be worth six figures?”
asked Ron Lieber in The New York Times.
Nearly all but the most selective schools now
consider grades as a factor not just for admis-
sion but also in “what you might pay.” In
Georgia, for instance, “a 3.0 grade point aver-
age or above can lead to thousands of dollars
per year off the price” at state schools. Many
schools aren’t shy about making the grades-
price connection explicit; Clark University
sent out an email in 2019 with the subject line
“Show me the money.” It’s worth having a
conversation about this with your kids surpris-
ingly early, even “two months into the summer
after eighth grade.” Wait any longer, and “the
vicious math of grade point averages may not
allow them to catch up.”DIY investors turn to expert advice
Rumors about the death of the financial ad-
vice industry appear to have been greatly ex-
aggerated, said Kamaron Leach in Bloomberg
.com. One study released in October found
that “40 percent of U.S. investors said they
need more advice,” while “those who said
they were willing to pay a financial profes-
sional rose to 56 percent, up 5 percentagepoints from 2019.” The rebound in expert
outreach may be a counterintuitive outgrowth
of the rise of investing apps such as Robin-
hood. While these apps were once seen as
“the death knell for the financial planning and
advice industry,” more investors have “come
to realize there are a lot more components in-
volved in building wealth” than picking stocks
or index funds. The year’s market gyrations
also may have convinced some traders that
their portfolios require “constant attention.”Fitness apps’ growing monthly fees
“Taking a page out of the Netflix handbook,”
fitness apps from Peloton, Apple, and FitBit
have turned to pricey subscription models,
said Rachel Lerman in The Washington Post.
Instead of simply “watching free workout
videos online” when the pandemic closed
many gyms, “consumers became more will-
ing to shell out cash on workout apps.” The
subscription model has been key for Peloton.
“More than 1.3 million people currently
both have the bike and subscribe to the $39
monthly service that gives them access to
guided workouts.” Apple also recently entered
the market with its $10 monthly Fitness+ ser-
vice, “which offers workouts and personalized
data combined with Apple Watch hardware.”What the experts say
The ALS Therapy
Development
Institute (als.net)
was founded in
1999 by James
Heywood, after
his brother was
diagnosed with
ALS, a neuro-
degenerative disorder also known as Lou
Gehrig’s Disease. ALS attacks nerve cells
and the spinal cord, eventually destroy-
ing a patient’s muscular control. Finding
no suitable treatment options, Heywood
started ALS TDI to bridge the existing
gap in developing therapies. Today,
the institute operates one of the most
prominent ALS drug discovery labs and
takes a multipronged approach to ending
ALS, using clinical, preclinical, and basic
research to turn scientific advances in
understanding ALS into effective treat-
ments. Though there is no current cure,
ALS TDI is the first biotech nonprofit to
develop a potential treatment and bring
it to a human clinical trial.Charity of the week
Each charity we feature has earned a
four-star overall rating from Charity
Navigator, which rates not-for-profit
organizations on the strength of their
finances, their governance practices,
and the transparency of their operations.
Four stars is the group’s highest rating.