Increasing the Capital-Gains Tax — Penalizing Initiative, Enterprise, and Not Just ‘the Rich’

Mr. Biden will propose several tax increases he included in his campaign’s “Build Back Better” agenda. That starts with raising the top marginal income tax rate to 39.6 percent from 37 percent, the level it was cut to by President Donald J. Trump’s tax overhaul in 2017. Mr. Biden would also raise taxes on capital gains — the proceeds of selling an asset like a stock or a boat — for people earning more than $1 million, effectively increasing the rate they pay on that income to 39.6 percent from 20 percent.

The president will also propose eliminating a provision of the tax code that reduces taxes for wealthy heirs who sell assets they inherit, like art or property, that have gained value over time. And he would raise revenue by increasing enforcement at the Internal Revenue Service to bring in more money from wealthy Americans who evade taxes.

Administration officials were debating other possible tax increases that could be included in the plan this week, like capping deductions for wealthy taxpayers or increasing the estate tax on wealthy heirs.

All of the tax provisions would keep with Mr. Biden’s campaign promise not to raise taxes on individuals or households earning less than $400,000 a year.

Joe Biden by Lisa Ferdinando is licensed under CC BY 2.0
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