Leaks from the White House have indicated that President Biden could propose an increase in capital gains tax
Leaks from the White House have indicated that President Biden could propose an increase in capital gains tax to 39.6%, a nearly 100% increase for some taxpayers.
Bloomberg reports calculated that the new rate for high income and asset rich individuals could reach 43.4%. The Dow has already fallen significantly on the back of the news.
If enacted, this tax hike would upend the American tax system which currently taxes income higher than returns on capital assets. Details are expected to be forthcoming, which should give greater insight into how this might impact housing, especially the real estate investment investment market.
The plan would serve to fund part of Biden’s “American Families Plan” which could cost as much as $1 trillion, following trillions of dollars in enacted and planned spending addressing infrastructure and the COVID-19 pandemic.
In some states, this tax hike would mean that Americans earning over $1 million annually would pay more than half their income in taxes.
“His view is that it [infrastructure and childcare investment] can be on the backs of the wealthiest Americans who can afford it, and corporations and businesses who can afford it,” said White House press secretary Jen Psaki. “His view, and the view of our economic team, is that that won’t have a negative impact."