Impending US Tax Changes Must Consider Impact Of Great Wealth Transfer On Women, Says Tax Policy Expert Sandra Swirski

Since time immemorial, women have been disadvantaged when it comes to wealth in a patriarchal society. It wasn't until 1974, with the passage of the Equal Credit Opportunity Act, that women in the US were allowed to open their own bank accounts without restrictions. Prior to that, banks often required married women to get their husband's signatures and refused to serve unmarried women.

While many things have changed, many also haven't. Today, 94% of women believe that their economic power is being underestimated, according to the Ellevest Women and Wealth Survey 2024. This same study also found that there is a so-called Feminization of Wealth, with women being the primary beneficiaries of The Great Wealth Transfer, as the Silent Generation and Baby Boomers retire and pass over to their spouses (typically women) and down to their heirs: Gen X, Millennials, and Gen Z. By 2030, American women will manage at least $30 trillion, exceeding the entire US GDP for 2023.

This Feminization of Wealth happens in two ways, according to Ellevest. The first is due to the fact that women tend to live longer than men, resulting in female Boomers managing their wealth independently. The second way is that, due to marriage becoming less popular with the Millennial generation, a record-high number of single women stand to inherit the wealth of their parents or relatives.

As more women are poised to inherit untold amounts of money, this has a huge impact on their economic strength and standing. For the longest time, women suffered from a money confidence gap. However, receiving a major financial windfall, such as an inheritance, wipes out that gap. The survey found that the windfall boosts women's confidence in their ability to manage their money from 45% to 81% — even exceeding that of men (77%).

Furthermore, it's not just women who will benefit from this, but society in general via philanthropy. A study by The Indiana University Lilly Family School of Philanthropy found that women are more likely than men to engage in philanthropy and tend to give more to causes advancing women's and girls' welfare.

By controlling their own wealth, women can freely support organizations and politicians who share their values. In recent years, many female billionaires have made major philanthropic moves that made headlines, and the Great Wealth Transfer ensures that this will happen at a wider scale in the future.

With the Great Wealth Transfer promising such huge benefits for women, it's essential to ensure that these come to fruition by ensuring tax policies are favorable, says Sandra Swirski, an executive, thought leader and expert sitting at the intersection of policy and philanthropy. As founder of policy advocacy firm Integer Policy, Swirski uses her savvy, coalition-building expertise, and deep industry knowledge to build solutions and progress for those she works with and the causes she cares about.

According to Swirski, numerous US tax policies are expected to change in the next two years. These include investment taxes, individual taxes, estate taxes, and wealth taxes. This year's elections will also impact the scope of changes to these policies. For example, the Biden Administration has floated a 44% tax rate on capital gains, while leading Democrat and Republican senators have proposed ideas such as wealth taxes and taxing unrealized gains in people's portfolios.

Philanthropy offers people the opportunity and the tools to flourish. A 2021 study by the Lilly Family School of Philanthropy found that everyday Americans are giving less to charity, with the proportion of US households giving to charity slipping below 50% for the first time in 20 years. Swirski says that ill-advised tax policies can limit the Great Wealth Transfer, further accelerating this decline.

"Let's make sure we get this right so that the Great Wealth Transfer doesn't become a trickle," Swirski says. "It means so much to women's perception of their own economic security. If tax policy fails to acknowledge the tremendous benefits of the Great Wealth Transfer to women, Congress will not only affect their economic security but also their philanthropy."