Joe Biden to double tax on capital gains for the rich

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Joe Biden to double tax

WASHINGTON (DC) : US President Joe Biden wants wealthy individuals to pay a lot more tax on the profits they derive from their assets. Insiders report to Bloomberg news agency that he wants to nearly double the federal top rate for capital gains tax.

Currently, the federal government taxes Americans with incomes over $ 1 million 20 percent on profits they make from the sale of, for example, stocks, bonds, or real estate. Biden reportedly wants to increase this rate to 39.6 percent.

Combined with an additional 3.8 percent tax on investment gains introduced in 2013 to fund Barack Obama’s health insurance reform, the tax rate for many wealthy Americans comes out at 43.4 percent. If the proposals are passed, the top rate on capital gains tax could become higher than that on income from work.

Earlier this year, Biden announced an investment package of more than $ 2 trillion, aimed at, among other things, improved infrastructure and the greening of the American economy. He wants to finance those plans with higher taxes.

Democrats have long criticized the fact that top rates for capital gains tax, in short, money you earn with money, are lower than those for salaries or wages. This would favor the rich. In certain cases, wealthy entrepreneurs have to pay less tax than the employees they employ.

However, arguments are put forward from mainly conservative quarters as to why it is good to tax the profit from property lower than income from work. Lower rates, for example, stimulate investments in promising companies that can grow quickly. In addition, a capital gains tax does not take into account the inflation that can explain a large part of gains on, for example, shares, critics argue.