Politics Stocks drop after reports that Biden wants to double capital gains tax for wealthy
Why some of the most liberal Democrats in Congress want to bring back a tax break for the rich
Democrats want to raise taxes. So why are they debating cutting them for some well-off taxpayers?In their 2017 tax bill, Republicans partially closed a tax loophole that mainly affected higher-income people in high-tax areas — i.e., relatively well-off people in blue states. They capped the state and local tax deduction (SALT) people can take when calculating their federal income tax at $10,000. People can still deduct state and local taxes from their federal tax bill, but only up to that point.
Stocks dropped Thursday amid reports that the Biden administration will propose a large hike of the capital gains tax in order to pay for his childcare and family spending plan.
Thethe capital gains tax for wealthy individuals from the 20% rate it is at now to 39.6%. Individuals making $1 million or more could paying a federal rate of up to 43.4% when an existing Obamacare surtax on investment income is included.
The news, while not yet confirmed, caused stocks to drop the most in over a month, with the S&P 500 down about 0.92% at close. The Dow Jones Industrial Average closed more than 320 points lower, and the NASDAQ was down by about 0.94%.
Wall Street Spooked by Biden’s Tax Plan
Investors fear the president’s new capital gains tax will hurt America’s salt-of-the-earth, hardly working millionaires.On Thursday, the White House leaked word of its impending proposal for nearly doubling the capital gains tax for investors who earn more than $1 million a year. Biden proposed this exact policy — which increases the rate on long-term capital gains from 20 percent to 39.6 percent — in July 2019. He never disavowed the proposal at any point during his campaign.
The possible capital gains tax hike is part of a second spending proposal (after Biden’s $2.3 trillion infrastructure package) and is being billed as the American Families Plan. The plan is expected to cost at least $1 trillion and is reportedly set tothat would extend the , which was recently strengthened for a year as part of Biden’s $1.9 trillion American Rescue Plan, through 2025.
White House press secretary Jen Psaki didn’t deny the Thursday reports that the White House is considering a proposal to nearly double the capital gains tax and said that the president would address his American Families Plan during a joint session of Congress next Wednesday. “We’re still finalizing what the pay-fors look like,” she said.
GOP digging in against Biden’s 'terrible idea' of raising capital gains tax
Republicans are staunchly opposing President Joe Biden's plans to pursue a hike in the capital gains tax in order to pay for his family spending plan. © Provided by Washington Examiner The administration is reportedly weighing nearly doubling the capital gains tax for wealthy individuals from 20% to 39.6%. Individuals making $1 million or more could end up being subject to a federal rate of up to 43.4% when an existing Obamacare surtax on investment income is included.
While the newest plan targeting families is reported to include changes to the capital gains and income taxes, Biden’s infrastructure package, billed as the American Jobs Plan, is planned to be offset by changes to the corporate, including a hike of the corporate tax rate from 21% to 28%.
Republicans are unlikely to support any increases in taxes from where they were set by the GOP-led Congress back in 2017. Chuck Grassley of Iowa, a top Republican on the Senate Finance Committee, said Biden’s reported capital gains plan would “cut down on investment and cause unemployment.”
GOP senators introduced their ownto Biden’s infrastructure plan on Thursday. The lawmakers proposed a framework that would cost less than a quarter of the White House plan and target infrastructure more narrowly, focusing on things such as roads, bridges, and public transit systems. The GOP framework was pegged at $568 billion.
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As President Joe Biden approaches his 100th day in office, CNN Opinion asked contributors to share their assessment of the Democratic leader's performance thus far.David Axelrod: A welcome tonic after years of chaos
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Biden's corporate tax plan takes aim at income inequality .
WASHINGTON (AP) — From John Kennedy to Ronald Reagan to Donald Trump, American presidents have taken aim at corporate America's tax-avoidance schemes before — and mostly missed. Now, President Joe Biden is training the government’s sights again on the loopholes, shelters and international havens that have long allowed multinational companies to dodge taxes in ways that ordinary households cannot. The idea is twofold: First, to help pay for Biden's trillions in proposed spending — for everything from roads and bridges and green energy to internet access, job training, preschool and sick leave.