No, say the nation’s independent financial advisors. In a recent poll by the Financial Services Institute, an advocacy group for independent advisors and financial services firms, the overwhelming majority (79%) said they believe that President Barack Obama and the U.S. Congress will reach a deal to avoid the $600 billion in automatic spending cuts and tax increases scheduled to go into effect by the end of this year.
More than seven in 10 (72%) believe that the deal will include both higher marginal tax rates for wealthy Americans as well as curbs on deductions. Fully 90% believe that the deal should include both fundamental tax code and entitlement reforms.
That said, most advisors (70%) do not believe that Americans making over $200,000 individually and $250,000 as a family should be taxed at a higher rate, with 68% saying that higher taxation on these Americans would dampen investing and saving. More than half (58%) believe that the capital gains tax should remain at its current rate of 15%, with 20% saying it should rise to 32%.
Despite their optimism about avoiding the fiscal cliff, advisors were downbeat about the prospects for the U.S. economy. Half said that the economy will remain flat in 2013 and almost one in four (23%) said it would worsen.
They were also bearish on the stock market, with 59% saying that equities performance would remain flat in 2013 and 22% saying it would be weak.
“With the election behind us, all eyes are now on Capitol Hill and the White House as fiscal cliff talks continue,” FSI President and CEO Dale Brown said in a statement. “Our independent financial advisor members have a unique vantage point on these issues as they work closely with Main Street American investors on a daily basis. While they recognize the need for compromise and reforms in order to make our country financially sound, they also see how many of these significant changes will impact their clients’ ability to save for retirement, pay for their children’s education or care for aging parents.”
The poll was conducted November 19 – 27 by the Financial Services Institute. More than 2,400 financial advisors completed the survey.