tax the rich

President Biden to Unveil Plan for Increased Spending on Social Programs Funded by New Tax on Multimillionaires

In a televised speech he will make before both houses of Congress on Wednesday, April 28, President Biden plans to unveil “The American Families Plan,” a new tax plan aimed at making the nation’s millionaires pay for desperately needed social support, including increases in childcare spending, education, and paid leave.

Ayesha Rascoe of NPR has reported that, in order to fund the proposal, Biden will ask Congress to raise taxes on the sale of stocks and other types of investments.

“The proposal, which is certain to face resistance from Republicans and even some Democrats, calls for hiking capital gains taxes for those who make more than $1 million a year,” Rascoe said.

In a press conference with reporters, Brian Deese, the head of the National Economic Council broke down who would be most impacted by the new tax.

“This will only apply to three-tenths of a percent of taxpayers, which is not the top 1%. It’s not even the top half of 1%,” Deese said. “That’s about 500,000 households.”

Although Deese didn’t reveal any specific figures from the plan, some reports have suggested it might include a near doubling of the tax rate for these investments, raising the current 20% tax to 39.6%.

“Deese said increasing capital gains taxes for the wealthiest Americans will also help address what the White House views as inequities in the tax code,” Rascoe reported. “Deese argued that these top earners have been able to avoid higher tax rates because only about 30% of their income comes from wages.”

Greg Iacurci of CNBC has reported that more than 75% of investors who own stock (one area of investment being targeted by the new proposal) have other investments in accounts that aren’t subject to a capital gains tax, including 401(k) plans, individual retirement accounts and other types of accounts not subject to the tax — further illustrating that only a select number of individuals would be impacted by Biden’s new proposal.

“The remaining 25% of investors hold stock in taxable brokerage accounts that would be subject to capital gains tax,” Iacurci added. “However, a tax hike wouldn’t necessarily apply to all these taxable accounts either. Biden’s policy is [only] expected to hit taxpayers whose income exceeds $1 million each year.”

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