The Biden government has unveiled plans to impose taxes on millionaire investors, according to a flurry of recent reports. President Joe Biden wants to reform the US economy to help fund US childcare and education. Biden’s proposal will nearly double the current tax rate on capital gains from 20% to 39.6%, and for some investors, the tax rate could be as high as 43.4%.
Biden’s capital gains tax rate on high net worth individuals can be as high as 43.4%
Immediately after proposing new stimulus measures to bolster the US economy, President Joe Biden also plans to increase the tax rate for wealthy individuals by $ 1 million or more. The increased capital gains tax will be nearly double and possibly even 43.4% for some individuals.
Any report disclosing the capital gains issue comes from people who are familiar with the proposal but wish to remain anonymous. Currently, the U.S. capital gains tax is about 20%, and the marginal rate of 39.6% is intended to apply to wealthy Americans.
Proposed capital gains tax increase?
I’ve heard Puerto Rico is fun at this time of year …
– Jameson Lopp (@lopp) April 23, 2021
Furthermore, the 3.8% capital gains tax will also be tied to the 39.6% to bolster Obamacare’s financing. Biden began talking about a major overhaul of the tax code in the first week of April, as his government hopes to generate $ 2.5 trillion in revenue over a 15-year period.
Thursday afternoon, when the stock markets were open, traders began to sell stocks and bonds. The ten-year Treasury fell and stocks such as the S&P 500 Index also suffered some losses on Thursday, but stocks and bonds recovered on Friday morning.
Bitcoin (BTC) and a number of crypto assets have also suffered some losses after 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 not routed was ethereum (ETH). Jeffrey Halley, senior market analyst, Asia Pacific, at OANDA noted that BTC’s depreciation was due to Biden’s tax reform proposal.
“Bitcoin went south today after President Biden indicated he wanted to increase the capital gains tax in the US,” Halley explained on Friday. “Whether that happens or not, many bitcoin investors are likely to have significant capital gains if they stayed on track for the past year. “I firmly believe that developed market regulation and / or taxation remains the Achilles heel of the crypto markets.”
Since Thursday’s revelations about the tax hike went viral, the crypto economy has also recovered a hair, but many digital assets have not fully regained all losses.
We can probably attribute bitcoin’s sharp decline to US investors facing a capital gains tax if they sell the cryptocurrency after holding it for more than a year amid reports that President Biden is considering doubling it for the wealthy. , Don Guo, CEO of Broctagon Fintech Group told Bitcoin.com News in an email. “Furthermore, investors will see the fall in crypto market prices as an opportunity to broaden their portfolio by increasing their capital expenditures on average and buying new altcoins such as ethereum,” added the director.
Guo further noted:
Therefore, as for bitcoin, a further decline is unlikely as the major conglomerates will see it as an opportune time to step into bitcoin acquisition while prices are relatively low.
The White House press secretary says plans are still being finalized
President Biden revealed his efforts to increase the capital gains on wealthy individuals during his campaign. Individuals opposed to the idea have complained that a million dollars doesn’t necessarily make a person “rich” these days. Critics have said this will be a burden to those who don’t have much wealth and that the extremely wealthy will just find loopholes. White House press secretary Jen Psaki discussed the tax reform at her briefing on Thursday with a quick response to a reporter’s question.
“We are still finalizing what the payments look like,” Psaki told the press. Meanwhile, Republicans are fighting for the tax cuts imposed by former President Trump and can try to stop the proposal. The Biden administration also wants to increase inheritance tax for wealthy individuals. Americans who earn $ 400,000 or more annually could pay more in tax to help pay for the American Jobs Plan.
What do you think of Joe Biden and his administration looking to increase capital gains for those who have $ 1 million or more? Let us know what you think about this topic in the comments section below.
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