US President?Joe Biden?is going to propose a series of new tax increases on billionaires, rich investors, and corporations in his latest proposal amid the plan to cut $3 trillion in the deficit within the next decade.??
Biden’s budget request to Congress, which is slated to be released today, i.e. Thursday, calls for a 25% minimum tax on billionaires, according to a White House official familiar with the proposal. The plan would also nearly double the capital gains tax rate for investment to 39.6% from 20% and raise income levies on corporations and wealthy Americans.
President Joe Biden's upcoming budget proposal aims to cut deficits by nearly $3 trillion over the next decade, the White House said on Wednesday,as per a Bloomberg report.
The US President had contended earlier this week in his speech that there are 680 billionaires in the United States and that many of them pay taxes at a lower rate than do families who think of themselves as being in the middle class, as per AP.?
The Biden proposal would require the richest 0.01% of Americans to pay at least a 25% tax rate. It would also increase the top tax rate for Americans making $400,000 to 39.6% from 37%, reversing one of Trump’s tax cuts, though tax rates for those making below that amount would remain untouched. It additionally calls for investors making at least $1 million to pay that 39.6% on their long-term investments, which are currently taxed at a 20% rate.
The proposal would increase the corporate tax rate to 28% from 21%, undoing another signature Donald Trump tax change. It would also eliminate a loophole that business owners and higher-earners can exploit to avoid paying levies for the Medicare Hospital Insurance Trust Fund on more of their income. White House officials so far have not indicated that Biden’s budget includes new Social Security payroll taxes on wages above $400,000, which some Democrats have proposed to shore up the program.
House Speaker Kevin McCarthy immediately dismissed Biden’s plans to increase levies, telling reporters Wednesday, “I do not believe raising taxes is the answer.”
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US President Biden is also calling for an end to valuable industry-specific tax breaks for?investors in crypto and real estate,?private equity fund managers, and oil companies in his upcoming budget proposal, according to a summary of the plan. If these were to become law, they would upend the economics of many real estate and investment-fund transactions, forcing Wall Street to reinvent the way many transactions have been done for decades.
Biden is proposing eliminating the carried interest tax break, which allows private equity managers and venture capitalists to pay lower rates on their earnings from the investments they make. The Biden plan also ends a longstanding tax break for real estate investors, who can avoid paying capital gains taxes on their profits if they continue to invest the proceeds in other properties, as per a Bloomberg report.
The administration is also calling to end a break that allows?crypto investors to sell their assets at a loss (generating big tax savings) and then immediately repurchase those currencies. In addition, all special tax preferences for oil and gas companies would be terminated, saving $31 billion.
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