Michael Savage of New Canaan Speaks of Biden’s Proposed Tax Hikes

Recently President Joe Biden unveiled his “American Families Plan,” aimed at expanding the Child Tax Credit and establishing programs for universal pre-K, free community college and paid family leave.

This bill would cost an estimated $1.8 trillion.

To pay for this bill, Biden is proposing raising taxes on the country’s wealthiest individuals and corporations from 37% to nearly 40%.

How Biden’s plan will affect income taxes and capital gains remains to be seen.

Biden does want to increase capital gains taxes so that if a family or individual earns more than $1 million, they would pay the same rate on profits from selling their investments – capital gains – as they do on their wages.

Currently, the highest-earning taxpayers owe a 20% capital gains tax on assets held for over a year. Biden would increase this to 39.6% for top earners, meaning, “If you’re making more than $1 million, your capital gains tax is pretty much doubling,” says Mike Savage, CEO of 1-800Accountant.

This change could greatly affect the stock market as well.

Savage of New Canaan, CT told money.com that if the capital gains tax does go up, investors could hold onto their assets instead of selling. In addition, if corporations have to pay more in taxes, their earnings could fall, and their stock prices might dip affecting those holding that stock.

Lots of “ifs” including if this bill has even a slim chance to pass. Republicans in the House and Senate are decisively saying, “No.”