Biden's Proposed Budget Would Increase Capital Gains Tax Rate to 44.6%
A significant increase from the current 20% rate
The proposed change would affect investors who make at least $1 million in capital gains annually
President Biden's fiscal year 2025 budget proposal includes a significant increase in the top capital gains tax rate to 44.6%. This proposed change would nearly double the current 20% rate and would apply to investors who make at least $1 million in capital gains annually. The proposed rate increase would also be coupled with state taxes, resulting in an even higher effective tax rate.
The proposed capital gains tax increase is part of a broader effort by the Biden administration to raise revenue to fund its spending priorities, including the Affordable Care Act and Medicare. The administration has argued that the current capital gains tax rate is too low and that increasing it would help to ensure that the wealthy pay their fair share of taxes.
However, critics of the proposed tax increase argue that it would stifle investment and economic growth. They also argue that it would disproportionately impact small businesses and entrepreneurs, who often rely on capital gains to fund their businesses.
The proposed capital gains tax increase is still in the early stages of the legislative process and it is unclear whether it will ultimately be approved by Congress. However, the proposal has already generated significant debate and is likely to be a major issue in the upcoming midterm elections.
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