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GUY What are some potential tax law changes that we should be aware of under the new Biden administration? My expectation is that the estate tax exemption will drop significantly from the $11 million-plus per person down to $5 million or even lower. I also believe they are going to try to do away with the lower capital gain rate for high-income earners. I would expect the corporate income tax rate to go back up from the current 21 percent to at least 28 percent or even higher. In addition, I believe they are targeting an increase on the income tax rates on those taxpayers that earn over $400,000 per year. What has been the impact regarding government stimulus efforts for small businesses such as the Paycheck Protection Program (PPP), the Employee Retention Credit (ERC) and the Main Street Lending Program? I truly believe that the PPP loans were one of the best bipartisan decisions to come out of Washington in a long time. Now the execution hasn’t been perfect, but being involved with so many small to midsize businesses, I have seen the dramatic impact these loans/grants have had to ensure the survival of those businesses through the pandemic. It is absolutely critical for small to midsize businesses to have advisors that are aware of all of the programs that are out there as there is way more access to capital than people think. The ERC is a great example of that. So was the Main Street Lending Program, which was short-lived toward the end of 2020, but another excellent source of capital at a time when traditional senior lenders were not doing deals.
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Walter & Shuffain partner William Cooper gives his take on taxes, the state of the economy and the unique opportunities emerging amidst the pandemic What have been the challenges in raising money or obtaining financing or closing M&A deals given that 2020 was a “COVID” year? Again, having knowledgeable advisors is just so critical. Traditional senior lending and other financing opportunities are very challenging in the current environment. Although everyone says they will look past the 2020 results and rely on 2019 and/or 2021 forecasts, in practice that is very difficult. You have to be able to be creative and take advantage of the opportunities that are out there. Some argue that the economy is bound for a correction soon. If that’s the case, what should people be doing to best protect themselves? Whenever there is a bull market for a long period of time, the common expectation is that the economy is due for a correction. I believe that we are in a very unique environment today where the pandemic has impacted so many people and so many businesses in a negative way yet the stock market and many other businesses are flourishing. If you are in the camp that a correction is coming, my advice is, as always, to make sure you are properly diversified. If you have a longer time horizon in which you will need your money, then stay the course as I still believe there is plenty of upside in the U.S. economy. If you are on more of a short-term time horizon, then you should not be invested in anything that could really be negatively impacted by a correction. Given the uncertainty of the times, what’s the best way for someone to grow their money without a tremendous amount of risk? Again, just be properly diversified so that volatility in one area does not ruin you. It is also critical to understand your needs and to be sure to protect any funds that are needed in the short term. What unique investment opportunities have emerged amidst the pandemic that have surprised you? Cryptocurrencies. If you have the stomach for the volatility, there
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