Breaking: According to a plan leaked to Bloomberg, President Biden has issued a proposal seeking to double the capital gains tax rate from 20% to 39.6% for people making over a million dollars. Additionally, investors at or above the one million dollar threshold would also be required to pay 39.6% on their long–term investments, up from the current rate of 20%. Biden has also put forward a corporate tax rate hike to 28% from 21%. The message according to Biden: The rich must pay their fair share. But does this hefty piece of legislation have any shot at passing? Or is it all just political theater ahead of election season?
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President Biden’s recent proposal to double the capital gains tax rate from 20% to 39.6% has been met with criticism from many who argue that this policy will have negative consequences for the economy. Proponents argue that this is only a tax on the wealthy. Critics argue that increasing taxes on millionaires, billionaires, corporations, and rich investors will only serve to stifle innovation and hinder economic growth. Additionally, House Speaker Kevin McCarthy has expressed his opposition to the proposal, stating that he does not believe that raising taxes is the answer to the country’s economic woes.
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Some economists argue that the proposal will ultimately hurt the middle class, who are often forced to bear the brunt of tax increases — even those that are not directly targeted at them. Furthermore, some have expressed concern that the proposal will discourage investment and entrepreneurship, possibly even creating a selling event for institutional investors, leading to a decrease in economic growth and job creation.
Despite the fact that polls have shown a majority of Americans favor taxes on the wealthy and large corporations,
It’s more likely that this is just one more move in the large game of Chess called “preparing for an election cycle.”
As such, it remains to be seen whether this controversial proposal will ultimately become law, or whether it will be met with continued resistance and opposition from those who believe that it is ultimately harmful to the economy and the American people.