Biden to seek to almost double capital gains tax for rich, report says

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Topline

President Biden will propose to raise the capital gains tax rate from 20% to 39.6%, Bloomberg first announced Thursday, which means the highest federal tax rate for some people with high incomes could reach 43.4% thanks to an additional tax of 3.8% on net investment. income that was passed on as part of Obamacare.

Highlights

The new rate of 39.6% would apply to people earning more than $ 1 million or more, Bloomberg reported, citing people familiar with the situation.

The proposed capital gains tax hike is just one of many ways Biden could raise taxes on high net worth people to pay for his U.S. plan for families, which will focus on child care. children, paid holidays and other elements of the “care economy”.

Although the White House has yet to release official details, the Washington post reported last week that the plan is expected to include $ 1 trillion in new federal spending and $ 500 billion in new tax credits.

The Dow Jones Industrial Average plunged 400 points on the news.

Key context

In addition to raising capital gains taxes, Biden advocates increasing the top tax rate on ordinary income from 37% to 39.7% and limited tax deductions for the wealthy. During his presidential campaign, he supported the return of inheritance and gift tax rates to 2009 levels (when the maximum rate was 45% and the inheritance tax exemption was 3, $ 5 million per person, compared to $ 11.7 million today). Biden also proposed expanding payroll taxes for people earning more than $ 400,000 a year to help shore up Social Security program finances as well as closing the basic “step-up” – a tax loophole that allows heirs to immediately sell appreciated assets which they inherit without incurring capital gains tax on those assets.

To monitor

The White House is expected to present Biden’s U.S. Family Plan – the follow-up to his infrastructure-focused U.S. Jobs Plan – ahead of her speech to a joint session of Congress next week. Biden has repeatedly promised that Americans earning less than $ 400,000 a year will not see any further tax increases under his plan.

Further reading

Biden eyes capital gains tax as high as 43.4% for rich (Bloomberg)

Bernie Sanders introduces new tax on Wall Street to fund free tuition (TBEN)

Biden’s American Families Plan Expected Next Week – Here’s Who Could Be More Taxed To Pay For It (TBEN)

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