Sandra Swirski: US Tax Changes Affect Women’s Wealth Gains

Sandra Swirski US Tax Changes Affect Women's Wealth Gains

By: Maria Williams

Women’s financial journeys have long been marred by historical disadvantages rooted in a patriarchal society. Despite gaining the right to vote more than half a century ago, it wasn’t until 1974 that women in the US could open their own bank accounts without restrictions, thanks to the Equal Credit Opportunity Act. Prior to this legislation, banks often demanded married women obtain their husband’s signatures and could outright deny services to unmarried women.

Significant strides have been made in women’s rights, yet gender-economic equality remains elusive. According to the Ellevest Women and Wealth Survey 2024, 94% of women feel that their economic power is undervalued. This survey highlights a phenomenon termed the Feminization of Wealth, where women are the primary beneficiaries of the Great Wealth Transfer. As the Silent Generation and Baby Boomers retire, they pass their wealth to their spouses (usually women) and their heirs: Gen X, Millennials, and Gen Z. By 2030, American women are expected to control at least $30 trillion, surpassing the entire US GDP for 2023.

Ellevest explains this Feminization of Wealth in two primary ways. Firstly, women tend to outlive men, leading to female Boomers managing their wealth independently. Secondly, with marriage rates declining among Millennials, an unprecedented number of single women stand to inherit wealth from their parents or relatives.

With more women poised to receive substantial inheritances, their economic power and confidence are set to surge. Historically, women have faced a confidence gap in financial matters. However, a significant financial windfall, such as an inheritance, can drastically improve their confidence. Ellevest’s survey indicates that such windfalls can increase women’s confidence in managing money by 1.8 times, from 45% to 81%, surpassing men’s confidence levels at 77%.

The benefits of the Great Wealth Transfer extend beyond individual women to society as a whole, particularly through philanthropy. Research from The Indiana University Lilly Family School of Philanthropy shows that women are more likely than men to engage in philanthropy and are more inclined to support causes that advance women’s and girls’ welfare.

When women control their wealth, they can support organizations and politicians aligned with their values. Recent years have seen many female billionaires making significant philanthropic contributions, a trend that the Great Wealth Transfer is set to amplify.

Given the substantial benefits women stand to gain from the Great Wealth Transfer, it’s crucial to ensure favorable tax policies, asserts Sandra Swirski, an executive, thought leader, and expert at the intersection of policy and philanthropy. As the founder of the policy advocacy firm Integer Policy, Swirski leverages her expertise in coalition-building and deep industry knowledge to craft solutions and drive progress for her clients and the causes she champions.

Swirski notes that numerous US tax policies are expected to change over the next two years, affecting investment taxes, individual taxes, estate taxes, and wealth taxes. This year’s elections will significantly influence these policy changes. For instance, the Biden Administration has proposed a 44% tax rate on capital gains, while prominent senators from both parties have suggested implementing wealth taxes and taxing unrealized gains in portfolios.

Philanthropy provides individuals with the tools and opportunities to thrive. A 2021 study by the Lilly Family School of Philanthropy revealed a decline in charitable giving among everyday Americans, with the proportion of US households making donations falling below 50% for the first time in two decades. Swirski warns that poorly conceived tax policies could hinder the Great Wealth Transfer, exacerbating this trend.

“We must ensure that the Great Wealth Transfer doesn’t dwindle to a trickle,” Swirski emphasizes. “It significantly impacts women’s perception of their economic security. If tax policy fails to recognize the immense benefits of the Great Wealth Transfer for women, Congress will jeopardize not only their economic security but also their philanthropic potential.”

The Great Wealth Transfer presents a historic opportunity for women to gain economic strength and influence. However, the realization of these benefits hinges on the adoption of supportive tax policies. As women prepare to inherit unprecedented wealth, the importance of fostering an environment conducive to their financial and philanthropic growth cannot be overstated.

Published by: Martin De Juan


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