Thursday, April 22, 2021

BREAKING: Biden Wants to Double the Top Capital Gains Tax Rate

Okay, it is clear, Joe Biden hates capital and essentially holds a Marxist view on the "struggle" between capital and labor.

According to Bloomberg, the president will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6%, which, coupled with an existing surtax on investment income, means that federal tax rates for investors could be as high as 43.4%.

The plan would boost the capital gains rate to 39.6% for those earning $1 million or more, an increase from the current base rate of 20%.

A 3.8% tax on investment income that funds Obamacare would be kept in place, pushing the tax rate on returns on financial assets higher than the top rate on wage and salary income.

The proposal could reverse a long-standing provision of the tax code that taxes returns on investment lower than on labor. Biden campaigned on equalizing the capital gains and income tax rates for wealthy individuals, saying it’s unfair that many of them pay lower rates than middle-class workers.

Well, you could equalize rates by lowering taxes on middle-class workers to capital gains but Joe is all about the big state and he has never ever thought about taking actions to shrink government even when he had a full grasp of his faculties.

We know now the Marxist part of his brain is still functioning--if you can call a Marxist brain ever properly functioning.

For $1 million earners in high-tax states, rates on capital gains could be above 50%.

For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22%. For Californians, it could be 56.7%.



  1. Will this simply induce a market crash if passed?

  2. Was a niiice afternoon to be holding some put options in one of my day trades. Does anyone think this will pass? I have my doubts it will wind up this high.

  3. Hey! You got rid of Trump, correct? That was ALLLLLL that mattered.
    Nothing else.

    Perhaps this is the Wanniski Moment approaching. "P3" for the Wave Theorists. Kondratiev. Whatever.

    Power was allowed to accumulate to the Central Government for over 100 years. You can't call it a Train Wreck since, by the time this plays out, there won't be any trains left. The steel for the tracks will have been stolen or confiscated by the State

    The next Elections may be the Last Chance for the Last Chance.
    "But...Hey!!! We got rid of Trump!!!"

    Great...Got Toilet Paper???


  4. So short term capital gains (taxed as ordinary income) could be less than long term capital gains?

  5. I suspect there will be a lot of divorces and asset splitting in order to minimize taxes on capital gains, as there is most likely the continuation of the "marriage penalty" for high income earners. Current example: One spouse a high powered lawyer, other mid-level management. Second spouse is taxed at highest rate of 37%. A divorce or never being married saves them about 12K in taxes/yr. New example: High powered lawyer and other spouse should divorce and put all trading accounts in lower earners name, saving beaucoup dollars, up to 19.6% (39.6% versus 20%) from taxation. Funny how there are always unintended consequences....

  6. Progressives: Deficits don't matter.
    Also progressives: We must tax the rich to pay for social programs.

  7. When confronted in insane tax supporters, I like to make it personal.

    I ask: "Would you personally put your hand into my back pocket to take out my wallet. Grab >50% of my cash, and think that's okay?"

    They usually respond: "Let's be reasonable."

    I retort: "So instead, you send your goons to take it from me instead? For your "reasons" that you think it is better that you control it than me? That I don't deserve my own person and property to be secure from your theft?"

    They: "Let's be reasonable, we have a society to maintain." (or something like that)

    I retort: "That's the crux. When it's someone else you call government, it's okay to have them use force and threat of violence. But you wouldn't do it personally because innately you know it's wrong."

    1. Saying exactly this, I confronted Bernie Sanders in a jetway awaiting our gate-checked bags. Stirred it up, for sure, his handlers were running cover.