President Joe Biden’s administration is weighing nearly doubling the capital gains tax on wealthy Americans to 43.4%, Bloomberg News reported Thursday.
The plan would raise the gains tax to 39.6% for Americans making more than $1 million a year, and that would add upon an existing 3.8% tax on that bracket that supports Obamacare, according to Bloomberg.
Biden has proposals to hike taxes on wealthy Americans in a number of his bills, including the American Jobs Plan, expected to be officially announced next week.
President Joe Biden's administration is weighing nearly doubling the capital gains tax on wealthy Americans to 43.4%, Bloomberg News reported Thursday.
dailycaller.com
The capital gains tax is now far lower than it was at times of significant economic growth in the past.
T
he biggest changes in capital gains taxes over the last decade came with the Tax Cuts and Jobs Act of 2017, disproportionately benefiting wealthiest Americans.
With the Former Guy's failed promise of re-building the nation's crumbling infrastructure, the challenge has only gotten more urgent, and those who will handsomely profit from such an investment should again assume their fair share of the cost.
The current administration is proposing a more equitable distribution of the tax burden.
Everyone knows that Democrats want to raise taxes on the rich, but what hasn’t gotten nearly as much notice is how much they’ve cut them for most everyone else — substantially more than Republicans did in the first year of their 2017 tax overhaul.
New estimates by Congress’s official forecasters show Democrats’ tax cuts — included in their March stimulus package — will drive down tax rates on low- and middle-income people so much this year that those earning less than $75,000, on average, will owe nothing in federal income taxes.
Those making between $75,000 and $100,000 will pay a scant 1.8 percent average tax rate this year, the nonpartisan Joint Committee on Taxation predicts.
That will shift the relative burden to the wealthy, at least temporarily, with those earning more than $500,000 expected to pay more than two-thirds of all income taxes this year.
It’s a flip side to Democrats’ campaign to raise taxes on the well-to-do, though one that’s sometimes overlooked. Much of the focus has been on their bid to raise taxes on wealthy individuals and corporations to help pay for big new spending initiatives.
Green Eyeshade Stuff:
Capital-gains tax rates jumped by nearly 9 percentage points in 2013 but stocks rose 30% that year, noted Mark Haefele, chief investment officer for global wealth management at UBS, in a note.
“In addition, we find no correlation between capital-gains tax rates and equity market valuations,” Haefele wrote. “Price-to-earnings multiples have been as low as 10x when the capital-gains tax rate was 20%, and as high as 18x when it was 35%. Ultimately, other factors such as the outlook for economic growth, monetary policy, and interest rates are much more powerful drivers of equity market returns and valuations.”
“Well, on the surface you’d think higher taxes wouldn’t be a good thing, but that’s actually not reality,” Detrick said, in a note. “In fact, the past two times we had an increase in the capital-gains tax stocks did really well for the next six months in 1987 and 2013.”
