What’s Biden’s plan for capital gains tax? Here is everything you need to know

The White House asked to nearly double capital gains tax for people who make over $1 million a year. Currently, the maximum tax rate is 20%. Biden’s administration plans to raise it to 39,6%. Moreover, the new tax proposal suggested eliminating any Medicare surcharge exemptions and, therefore, increasing the tax liability up to 43,4%.

President Joe Biden released his capital gains tax proposal back in April. Later, in September, the House Ways and Means Committee announced new tax legislation. The bill offered to increase capital gains tax from 20% to 25%. It is a much lower tax rate compared to 39,6% proposed by Biden. The new proposal applies to individuals with at least $400,000 income and married couples with $450,000.

Taxpayers with an income of over $1 million get more than half of their revenue from investments. Biden’s plan would have almost doubled the tax rate for this group of population. Luckily, the House plan will only increase the top federal tax rate from 20% to 25%. This is fantastic news for real estate investors.

Resources:

“Impact of Biden’s Tax Reform on the Real Estate Industry,” by Emma Ewing, Robert Cole (ksm, 2021)

“The House Ways And Means Committee Reports On Tax Law Changes,” by Matthew Erskine (Forbes, 2021)

“House Democrats’ capital gains tax proposal is better for the super rich than Biden plan,” by Greg Iacurci (CNBC, 2021)