Political reality is likely to curb, not stop, Biden’s proposed tax increases
Narrow Democratic majorities in the House and Senate provide plenty of political obstacles that could impede the president s tax plan.
April 29, 2021 4 MINS
President Biden is likely to succeed in raising taxes on the wealthy but not as much as he is proposing, experts said.
Biden introduced Wednesday night the American Families Plan, a $1.8 trillion package of spending to expand education, childcare, nutrition and other programs and establish national paid family and medical leave.
He would pay for his ambitious social policy reform by raising taxes on high-income earners. His proposals include boosting the highest individual rate to 39.6% for people making more than $400,000 annually, increasing capital gains rates from 20% to more than 40% for households making more than $1 million annually and ending the step-up basis for inherited assets for capital gains in excess of $
And it probably won’t be as high as Biden wants, Goldman adds.
News that President Joe Biden wants to hike capital gains taxes for the wealthy did not go over well on Wall Street last week. The S&P 500 on Thursday slid almost 1% at the prospect.
But maybe, just maybe, such higher taxes on gains from selling stock and other investment assets won’t slow market appreciation after all. Why? Because cap gains tax boosts haven’t in the past, UBS says. And anyway, it’s unlikely the rate will go anywhere near as high as Biden is proposing, by Goldman Sachs’ thinking.
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So far, people who have received the three rounds of stimulus payments said they re using most of the funds to pay down debt or sock away the money in savings, according to a new analysis from the Federal Reserve Bank of New York. That could indicate that people are using the money to whittle down debt they incurred during the pandemic as well as to build up an emergency fund in case of another shock.
Still, many people said they planned to spend their stimulus funds on the basics food and housing costs were cited as the top two uses of the third stimulus check following savings, according to a February poll from Bloomberg/Morning Consult.
Joe Bidens Pläne treibt die US-Aktienmärkte an – Dax profitiert handelsblatt.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from handelsblatt.com Daily Mail and Mail on Sunday newspapers.