Report: Biden Plans Retroactive Capital Gains Tax Hike
John Carney 27 May 2021
Thinking about selling some appreciated investments before the big Biden tax hike kicks in?
It may already be too late.
President Biden’s blockbuster $6 trillion budget assumes that his proposed capital-gains tax hike took effect in April, according to the Wall Street Journal.
Biden has proposed raising the top tax rate on capital gains to 43.4 percent from 23.8 percent for households with income over $1 million.
“The effective date for the capital-gains tax rate increase would be tied to Mr. Biden’s announcement of the tax increase as part of his American Families Plan, which includes an expanded child tax credit and funding for preschool and community college. He detailed the plan April 28, and the budget will be released Friday,” Richard Rubin of the Journal writes.
The retroactive aspect of the tax hike is a tacit admission that such a large tax hike is likely to change investor behavior as taxpayers seek to avoid paying such an elevated rate. Critics of the plan say it will hurt investment and economic growth by penalizing gains.
Capital gains on investments can result in triple-taxation. The income used to purchase a stock is typically taxed when it is received by a worker. The income of the company that generates returns is also taxed at the corporate level and any dividends paid are also taxed. The tax on the gain on sale, therefore, can amount to the third time a tax is levied on the original income from production.
https://www.breitbart.com/economy/2021/05/27/report-biden-plans-retroactive-capital-gains-tax-hike/
