Biden’s Economic Plan Would Redistribute Trillions and Expand Government
Franklin D. Roosevelt created the modern government-funded social safety net in the 1930s to aid lower and middle-income families paid for in part by jacking up taxes on the richest Americans. Dwight Eisenhower built the interstate highway system in the 1950s. John F. Kennedy defined federal industrial policy in the 1960s by pledging to put a man on the moon by decade’s end.
In his first 100 days in office, Joe Biden has been attempting to emulate all three, seeking to combine and update for the 21st century his predecessors’ visions for a muscular Washington role in the economy.
Provided by Dow Jones
By Jacob M. Schlesinger Franklin D. Roosevelt created the modern government-funded social safety net in the 1930s to aid lower and middle-income families paid for in part by jacking up taxes on the richest Americans. Dwight Eisenhower built the interstate highway system in the 1950s. John F. Kennedy defined federal industrial policy in the 1960s by pledging to put a man on the moon by decade s end. In his first 100 days in office, Joe Biden has been attempting to emulate all three, seeking to combine and update for the 21st century his predecessors visions for a muscular Washington role in the economy.
Stan Choe, The Associated Press
After massive U.S. government spending helped send the stock market back to record heights, with even more potentially on the way, the bill may be coming due for the nation’s wealthiest investors.
President Joe Biden has proposed to nearly double the tax rate that the highest-earning Americans pay on profits made from stocks and other investments. It would force millionaires to pay similar tax rates on their investment gains as upper-middle class households pay on their salaries, after years of enjoying lower rates.
The increase in the capital gains rate is part of Biden’s plan to tax wealthy individuals and corporations to pay for programs to help lower-income families and children.
Explainer: Capital gains tax hike targets wealthy investors By STAN CHOE, AP Business Writer
Published: April 28, 2021, 2:45pm
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2 Photos FILE - The New York Stock Exchange is seen in New York, Monday, Nov. 23, 2020. On Wednesday, April 28, President Joe Biden is expected to propose doubling the tax rate that the highest-earning Americans pay on profits made from stocks and other investments. (AP Photo/Seth Wenig, File) Photo Gallery
NEW YORK (AP) After massive U.S. government spending helped send the stock market back to record heights, with even more potentially on the way, the bill may be coming due for the nation’s wealthiest investors.
Wealthy Americans know the capital gains tax is their biggest loophole and they won’t give it up easily.
If you do sell, and you are one of the highest-earning Americans, current law says you’d pay a 23.8% tax on a $500 profit, or $119. That includes a 20% tax on investments held for more than a year, known as a “long-term capital gains” tax. It also includes an extra 3.8% tax on investments for high earners that’s been around since 2013 to help pay for the Affordable Care Act.
What is Biden looking to change?
Biden wants to raise the tax rate on long-term capital gains for Americans who make more than $1 million in a year. Their rate would rise to 39.6% from 20%. With the additional 3.8% tax, the highest-earning Americans could be paying a total tax rate of 43.4% on profits from long-term investments.