100-Year High: Biden’s Criminal 44.6 Percent Capital Gains Tax Proposal
The current rate sits below 25 percent. This unprecedented increase would destroy capital investment and freeze U.S. growth.
These demented clowns are evil.
“Taxing capital gains would reduce GDP, reduce job offerings, and reduce investment in the United States because people will just take their investments to lower tax areas,” Ms. Furchtgott-Roth says. “No one is just going to sit and let their capital gains be taxed at ordinary income rates, and it should not be,” said one of Washington’s leading labor economists, Diana Furchtgott-Roth. The former acting assistant secretary for Economic Policy at the United States Treasury.
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Americans for Tax Reform cautions that the new capital gains tax rate would come on top of state and local taxes, pushing the combined rate above 50 percent in many states. Californians would face a whopping combined federal-state rate of 59 percent, New Jersey a rate of 55.3 percent, Oregon 54.5 percent, Minnesota 54.4 percent, and New York State 53.4 percent.
The proposed new tax, Americans for Tax Reform writes, would hit small business owners as well. A couple who created a small business in their twenties and who, reaching 65, choose to sell it, would find themselves up against Mr. Biden’s 44.6 percent top rate plus state and local capital gains taxes.
High inflation will exacerbate the burden of capital gains tax, the director of communications at Americans for Tax Reform, John Kartch, argues. Since capital gains are not inflation adjusted despite inflation’s role in driving up gains, Americans will get “stuck paying tax on some ‘gains’ that are not real,” Mr. Kartch wrote in a post on X. “Biden’s high inflation makes this especially painful.”
Biden’s 44.6 Percent Capital Gains Tax Proposal a 100-Year High
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By Jim Thomas, Newsmax, 24 April 2024:
President Joe Biden’s proposal to increase the top capital gains tax rate could be the highest such tax rate in over a century.
In his 2025 budget proposal, Biden outlined plans to elevate the top marginal rate on long-term capital gains and qualified dividends to 44.6%. This rate, if enacted, would surpass any seen in over a century, according to Americans for Tax Reform (ATR).
Moreover, the combined federal-state rate could exceed 50% in several states when factoring in state capital gains taxes. For instance, California residents would potentially face a 59% rate, while those in New Jersey, Oregon, Minnesota, and New York could confront rates ranging from 53.4% to 55.3%, according to ATR.
Critics of the proposal argue that capital gains taxes, particularly when not indexed to inflation, impose a form of double taxation and disproportionately affect certain demographics. Small business owners, for example, may find themselves grappling with inflated tax liabilities on gains that are partly attributable to inflation rather than real profit.
Furthermore, comparisons with other nations highlight the potential ramifications of such a steep increase. China, for instance, maintains a capital gains tax rate of 20%, significantly lower than Biden’s proposed rate. The prospect of imposing higher taxes than a major economic competitor raises concerns about the impact on investment and economic competitiveness.
The history of the capital gains tax underscores the magnitude of Biden’s proposal. Initially introduced in 1922 at a rate of 12.5%, the tax has evolved over the decades but has never approached the proposed levels.
Additionally, Biden’s plan includes measures to address tax implications upon inheritance, potentially adding further complexity to the tax code. The proposal to eliminate a stepped-up basis upon the transfer of assets upon death could result in a mandatory capital gains tax event, affecting families’ financial planning and estate management.
“When someone dies, and the asset transfers to an heir, that transfer itself will be a taxable event, and the estate is required to pay taxes on the gains as if they sold the asset,” said Howard Gleckman, senior fellow in the Urban-Brookings Tax Policy Center, CNBC reported.
Article posted with permission from Pamela Geller
