According to people familiar with Biden’s proposal, the president is set to propose a tax hike not seen in American history in decades.
Biden hopes to double the current capital gains tax rate to a whopping 39.6 percent. Coupled with an already sky-high tax on investment income, wealthy Americans can expect nearly half, or 43.4 percent, of their income taken in taxes.
Wealthy Americans, or those making $1 million or more per year, are often the target for tax rises within Democratic administrations. However, those high earners just so happen to be the owners of business and industry, providing jobs and funding for many community projects. Under Biden’s plan, those business owners will likely be forced to make significant changes to their financial structures.
News of Biden’s plan caused a major slide in the stock market on Thursday, with the S&P index down 0.7% by mid-afternoon. The Nasdaq Composite fell 0.6% as well.
The Department of Treasury declined to comment on Biden’s proposal and the White House has remained silent as well. His “American Families Plan” is said to be unveiled next week as part of the tax increases needed to fund many of his Far-Left initiatives.
The “American Families Plan” will be introduced as Congress still remains conflicted on his earlier $2.5 trillion infrastructure project. The Plan will cost American taxpayers more than $1 trillion. Both of these trillion-dollar spending measures come just after Biden signed a $1.9 trillion Coronavirus stimulus package.
The trillion-dollar venture is rumored to include a wave of massive new spending on “children and education,” including an extension on an expanded version of Trump’s child tax credit. According to an estimate from the Urban-Brookings Tax Policy Center, Biden’s capital gains tax increase will only raise $370 billion in ten years.
High earners in Democrat-led states could see more than half of their income taken for taxes. For $1 million earners in New Yorker, the combined state and federal capital gains rate could be as high as 52.22%. For Californians, it could be 56.7%.
Author: Nolan Sheridan