US Tax Hikes Eyeing as High as 43.4%

Joe Biden is set to propose a capital gain tax for wealthy individuals to 39.6%, almost doubling the current base rate of 20% to address social and income inequality.

For wealthy individuals earning $1 million or more, federal tax rates could be as high as 43.4% to reflect the new top rate coupled with an existing surtax on investment income. The condition of the plan is not yet public.

According to people familiar with the matter, the 3.8% tax on investment earnings that funds Obamacare will remain in place, adding the tax rate on investment returns higher than rates on some salary and wage income.

According to ZERO Markets’ Metatrader 4 platform, the news sent US equities falling by the most in more than a month, with the Nasdaq 100 down 1.24% and the S&P 500 down 0.92% at the close. US 10-year Treasury yields fell by 5 points from a high of 1.59% to 1.54% intraday.

This proposal could radically reverse the provision of the tax code on taxing the investment income lower than on labor. Biden campaigned on equalizing income and capital gains tax rates for wealthy individuals, stating that it’s unfair that many wealthy pay lower rates than middle-class workers.

It this expected that Biden will announce the tax hikes to fund the upcoming social spending in the “American Families Plan” next week.