Biden sets out plans to raise taxes on the wealthy

2 minutes
Biden sets out plans to raise taxes on the wealthy

On Thursday, President Biden marks his first 100 days in office, and he has already outlined a number of proposals to raise taxes on the wealthy and corporations to fund his spending programs.

Biden unveiled his $1.8 billion American Families Plan this week which is focused on education and child care.

Prior to this announcement, he also announced the American Jobs Plan, a $2 trillion investment that includes a revamp of the nation's infrastructure as well as several child care proposals.

Both spending plans rely on wealthy tax hikes on businesses and wealthy people for funding.

The American Jobs Plan includes an increase in the corporate tax rate from 28% to 21%, a global minimum tax of 21% and eliminating various perceived loopholes in the corporate tax code.

The second proposal includes a number of increases on individuals and households, notably increasing the top personal income tax rate from 37% to 39.6%

The proposed proposal would increase the federal capital gains tax rate for more than $2 million to 39.6%, bringing it to line with the proposed top person tax rate.Currently, short-term capital gains are taxed in the same rates as income but long-term gains are taxed at lower rates.

Additionally, Biden wants to eliminate the stepped up basis provisions, which allows an individual who inherits property or assets from a decedent to immediately sell it and pay no tax.That is because the cost basis has been strengthened on the date inherited it from the price it initially paid for it into its fair market value.

The loophole would be eliminated for gains in excess of $1 million.

The White House has maintained that taxes will not increase for individuals earning less than $400,000.

Biden has been working with legislators on the American Jobs Plan since it was introduced in March.It is not clear whether Democrats plan on trying a fast-track approach to the legislation or whether they will try to move it via the bipartisan reconciliation process.

  • Comments
Loading comments...