1/ We're just going to rip off the Band-Aid
President Biden is aiming to raise taxes sooner rather than later, according to a new Bloomberg report.
Here's what you can expect from what would be the first major federal tax hike since 1993
President Biden is aiming to raise taxes sooner rather than later, according to a new Bloomberg report.
Here's what you can expect from what would be the first major federal tax hike since 1993
2/ FOR HIGH-NETWORTH INDIVIDUALS
1. Income tax would be bumped up to 39.6% for those earning $400,000+
2. Capital gains would be taxed like normal income if you earn $1 million+
3. Estate taxes would increase to 45% for assets worth $1 million+
1. Income tax would be bumped up to 39.6% for those earning $400,000+
2. Capital gains would be taxed like normal income if you earn $1 million+
3. Estate taxes would increase to 45% for assets worth $1 million+
3/ FOR BUSINESSES
The headline proposal is raising the corporate rate from 21% to 28%
Biden may also get rid of preferential tax treatment for "pass-through businesses" like LLCs and increase incentives to avoid offshoring
Why do this?
The headline proposal is raising the corporate rate from 21% to 28%
Biden may also get rid of preferential tax treatment for "pass-through businesses" like LLCs and increase incentives to avoid offshoring
Why do this?
4/ To stop what Treasury Sec. Janet Yellen calls the "race to the bottom"
From 2000–2018, 76 countries reduced their corporate rate; now the average rate is ~24%
Yellen feels this mostly benefited large corporations so she's working with allies to establish a global minimum tax
From 2000–2018, 76 countries reduced their corporate rate; now the average rate is ~24%
Yellen feels this mostly benefited large corporations so she's working with allies to establish a global minimum tax
5/ Another point of concern
UC Berkeley economists estimate 40% of profits earned by multinational firms (or $700+ billion) were located in tax havens in 2017
UC Berkeley economists estimate 40% of profits earned by multinational firms (or $700+ billion) were located in tax havens in 2017
6/ But critics of the plan argue that it puts companies at risk for double taxation
and the Tax Foundation estimates that some of the proposed changes to corporate taxes would reduce US GDP by 0.8% and wages by 0.7% in the long run
and the Tax Foundation estimates that some of the proposed changes to corporate taxes would reduce US GDP by 0.8% and wages by 0.7% in the long run
7/ So why try to raise taxes?
Put simply, the gov has been spending a ton of mula
The $1.9 trillion Covid package was funded largely with government debt so Biden is looking for a more sustainable source of income to fuel his ambitious $2–$4 trillion infrastructure package
Put simply, the gov has been spending a ton of mula
The $1.9 trillion Covid package was funded largely with government debt so Biden is looking for a more sustainable source of income to fuel his ambitious $2–$4 trillion infrastructure package
8/ Bottom line: This tax plan is aimed at the upper end of the income spectrum
The majority of Americans aren't likely to experience any changes
The majority of Americans aren't likely to experience any changes
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