Do you earn $1 million or more annually? If so, your tax situation could be rapidly changing.
President Joe Biden plans to continue his quest for increasing taxes on the wealthier members of American society with a proposal to almost double the capital gains tax rate.
The proposal, reported by Bloomberg, would set the number at 39.6%, which, coupled with an existing surtax on investment income, could put the federal rate as high as 43.4%, according to people familiar with the proposal.
The current base rate is 20%; a 3.8% tax on investment income that funds the Affordable Care Act would be kept in place.
States with already-high tax rates would feel the crunch. For New Yorkers making more than $1 million, the combined state and federal capital gains rate could reach 52.22%. Californians could see rates hitting almost 57%.
White House press secretary Jen Psaki didn’t go into detail about the tax provisions on Thursday. She did reiterate, however, that the president would not raise rates on anyone earning less than $400,000.
“His view is that (paying for the proposals) should be on the backs – that can be on the backs of the wealthiest Americans who can afford it,” Psaki said. “And corporations and businesses who can afford it. And his view and the view of our economic team is that that won’t have a negative impact.”
Biden is expected to release his plan next week as part of the tax increases to fund social spending in the forthcoming “American Families Plan.”
That proposal, expected at around $1 trillion, coincides next week with congressional discussions about Biden’s American Jobs Plan, a separate initiative with a price tag of $2.25 trillion that focuses on infrastructure — which would be funded by tax increases on corporations.