Joe Biden says that the economy under President Trump is lousy. He has come up with a plan that will raise $4 trillion dollars over ten years by raising taxes on all Americans. It would hurt the upper incomes and investment income the most. It is that investment income that drives the expansion of companies and creates jobs for those in the lower and middle class as well as their ever increasing incomes.
The capital gains tax has always been lower than the income tax and for a good reason. Capital gains does not take inflation into account, therefore you could see a 15% return but if during that same time inflation has gone up twenty percent, you could lose money and still owe taxes. You are also risking your principal. If you have to pay the same taxes as income, no one will be willing to invest.
But, one thing is certain, it will undo the Trump economy and take us back to the bad old days of the Obama/Biden economy. Toss in Biden’s plan to grant amnesty to 22 million illegals and paying for their medical care will throw Americans out of work.
The Tax Policy Center said top earners will bear most of the brunt of Biden’s income tax changes, but that taxpayers in all brackets will feel some impact.
“The highest-income households would see substantially larger tax increases than households in other income groups, both in dollar amounts and as a share of their incomes,” the report said.
Biden also wants to limit itemized deductions for high-income taxpayers and tax capital gains and dividends like ordinary income for millionaires.
In its reporting on Biden’s proposals, CNBC noted, “While Wall Street may view Biden as more moderate than self-declared democratic socialist Sen. Bernie Sanders, investors would still face dramatic tax increases under his proposals.”
“The proposal is very progressive,” Gordon Mermin, senior research associate at the Tax Policy Center, told CNBC.
“Right now, one of the biggest problems we have is low investment even with low interest rates,” Karl Smith, vice president for federal policy at the Tax Foundation, told The New York Times. “In general, taxing capital or productive assets is going to make that problem even worse.”