By Spy Uganda Correspondent
USA: The Biden administration has revealed plans to raise taxes on investors who are millionaires according to a flurry of recent reports. President Joe Biden wants to overhaul the U.S. economy in order to help fund American childcare and education. Biden’s proposal will almost double the current capital gains tax rate from 20% to 39.6%, and for some rich investors, the tax rate could be as high as 43.4%.
Fresh off the heels of proposing new stimulus in order to bolster the American economy, President Joe Biden is also planning to increase the tax rate on wealthy individuals with $1 million or more. The increased capital gains tax will jump to near double for some individuals and possibly even 43.4%.
Every report disclosing the capital gains matter stems from people who are familiar with the proposal but wish to remain anonymous. Currently, U.S. capital gains taxes are around 20% and the marginal rate of 39.6% is meant to be applicable to wealthy Americans.
Further, the 3.8% tax on capital gains will also be tethered to the 39.6% in order to bolster Obamacare funding. Biden started talking about overhauling the tax code in more depth during the first week of April, as his administration hopes to raise $2.5 trillion in revenue during a 15-year span.
On Thursday afternoon while stock markets were open, traders started to sell off stocks and bonds. Ten-year Treasury fell and stocks like the S&B 500 Index saw some losses as well on Thursday but stocks and bonds rebounded Friday morning.
Bitcoin (BTC) and a number of crypto assets took some losses as well after the tax news began to spread. On Thursday, BTC fell from a high of $55,186 per unit to a low of $47,555 at 3:45 a.m. (EST) on Friday.
BTC is currently trading just below the $50k range and the only crypto asset that did not get routed was Ethereum (ETH). Jeffrey Halley, senior market analyst, Asia Pacific, at OANDA noted that BTC’s slide in value stemmed from Biden’s tax overhaul proposal.
Since Thursday’s revelations about the tax hike went viral, the crypto economy has rebounded a hair as well, but many digital assets haven’t fully regained all the losses.
President Biden revealed his efforts to up the capital gains on wealthy individuals while campaigning. Individuals who are against the idea have complained that a million dollars don’t necessarily make a person ‘wealthy’ these days. Detractors have said that this will place a burden on people who don’t have much wealth and the extremely rich will simply find loopholes.
Meanwhile, Republicans are fighting for the tax cuts imposed by former President Trump and may try to stop the proposal in its tracks. The Biden administration also wants to increase the estate tax for wealthy individuals as well. Americans making $400k or more annually could pay more on estate taxes in order to help pay for the “American Jobs Plan.”