U.S. President Joe Biden will address jobs and the economy at the White House in Washington on April 7, 2021.
Kevin Lamarque | Reuters
President Joe Biden will seek to raise taxes on millionaire investors to fund education and other spending priorities as part of the government’s efforts to overtake the U.S. economy.
As part of the plan, Biden will seek to increase the capital gains tax from 20% to 39.6% for those Americans who earn more than $ 1 million, according to several outlets including Bloomberg News and The New York Times.
Capital Gains Tax is especially important to Wall Street as it dictates how much a portion of a stock sale is collected by the federal government. The White House declined to comment.
Shares gave way on the news of the plan, with the S&P 500 index falling 1% from 2:14 p.m. after rising 0.2% earlier. The Dow Jones Industrial Average and the Nasdaq Composite both fell by a similar amount.
The proposal would fulfill Biden’s election promise that America’s richest households must contribute more than a percentage of their income. This plan would bring the capital gains tax rate and the highest individual income tax rate close to par, currently 37%.
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According to reports, the president is expected to officially release the proposal next week to fund spending on the upcoming American family plan, which is expected to be around $ 1 trillion.
The American Families Plan is expected to include measures to help U.S. workers learn new skills, expand childcare subsidies, and make tuition fees free for everyone at community college.
This proposal would be separate from the $ 2.3 trillion infrastructure package known as the American Jobs Plan, which would be funded by increasing the corporate tax rate to 28%. White House lawmakers and Democrats managed to pass a $ 1.9 trillion Covid-19 aid package in March.