Biden proposes biggest capital gains tax in 100 YEARS as he continues raid on rich with huge hikes

President Joe Biden’s budget proposal for next year includes the largest capital gains tax seen in the last century.

The proposal, released last month, notes that the administration wants to increase the top marginal rate on long-term capital gains dividends to 44.6 percent, which would bring the tax rate to more than 50 percent in states like California, New Jersey, New York and others.

Critics note that the idea would “discourage investment” and could massively harm U.S. industries like technology while further shrinking the middle class.

The last time the capital gains tax was near this level was in the late 1970s, under Democratic President Jimmy Carter, when the rate peaked at 40%, setting it at a record level at the time. Otherwise, rates have remained below 30 percent and have fallen as low as 13 percent since the 1920s.

Capital gains are profits made from the sale of assets such as stocks, businesses, homes and other investments. The sale of these assets can generally trigger a taxable event.

Biden’s Treasury Department notes that raising the capital gains tax is a way to financially level the playing field between different races in the United States, saying it would apply equally disproportionate to white Americans.

“Black and Hispanic families are much less likely to hold stocks, and among families that do, the composition of their investment portfolios is very different from that of white families,” Biden’s team wrote in a document entitled Advancing Equity through Tax Reform: Effects of the Administration’s. Fiscal Year 2025 Revenue Proposals on Racial Wealth Inequality.

It notes that 73 percent of white families owned a home in 2023, compared to 46 percent of black families and 51 percent of Hispanic families. White families also own more stocks and businesses in 2023 than Black and Hispanic Americans.

The idea of ​​capital gains and taxes on them was established in the 1920s, and Biden’s proposal is the highest federal rate since its inception.

Although the proposed federal rate is 44.6 percent, combined with state rates, the capital gains tax would far exceed that of places like California (59 percent), New Jersey (55 .3 percent), Oregon (54.5 percent), Minnesota (54.4 percent). ) and New York (53.4 percent), according to Kitco News.

A footnote to the general explanations of the administration’s revenue proposals for fiscal year 2025 states: “A separate proposal would first increase the top ordinary rate to 39.6 percent…An additional proposal would increase the rate net tax rate on investment income of 1.2 percentage points above $400,000.

“Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent.”

Two separate proposals would need to be adopted in the final 2025 budget for the 44.6 percent figure to materialize.

Biden’s proposal says the rates are intended to level the investment playing field across races in the United States. The highest rate ever recorded before this proposal was in the late 1970s, under Democratic President Jimmy Carter, at 40 percent.

John Kartch, an analyst at Americans for Tax Reform, told Kitco: “The top capital gains tax rate proposed by Biden is more than twice as high as China’s rate…and places the United States in uncharted territory. »

“Biden’s proposed capital gains tax increase will also hit many families when parents pass away,” Kartch added. “Biden proposed adding a second death tax (separately and in addition to the existing death tax) by removing the step-up in basis upon the death of parents. This would result in a mandatory capital gains tax on death – a forced realization event.

Specifically, the proposal also eliminates a special tax subsidy for cryptocurrencies and other transactions. If the budget is approved, it could mean that higher-earning crypto and stock investors could see their income significantly reduced in the coming years.

The capital gains tax is in addition to the federal income tax, currently at 22 percent.

Biden’s fiscal 2025 budget proposal also aims to increase the corporate tax rate to 28%.