President Joe Biden is out this morning with a monster list of tax increases. Here they are:
- The top personal income tax rate is raised from 37 percent to 39.6 percent. This affects all taxable income north of about $550,000 for singles and about $650,000 for married couples.
- The IRS would get an annual report on the money deposited and withdrawn from every bank account in America. The IRS would literally be snooping on all your banking activity all the time.
- The top individual tax rate on long term capital gains and dividends would increase from 23.4 percent today to 43.4 percent, a new record high. Bye, bye stock market gains in your 401(k) and IRA.
- The Biden plan creates a second death tax on top of the existing one. Assets held at death would be taxed on their built-in capital gains at 43.4 percent. There would be a $1 million-ish exemption, but this new death tax kicks in much earlier.
- It’s important to note that this new Biden Death Tax is ON TOP OF the existing death tax. Once the Biden Death Tax is paid, the regular old Death Tax also has to be paid. The taxes cascade to a federal total of 66 percent, before states get their cut.
- This new Biden Death Tax will mean that millions more families will have to pay a death tax, something that decades of tax relief from both parties have exempted them from. It will surely affect families making less than $400,000 per year.
- The new 43.4 percent capital gains tax also means that “carried interest” gains are taxed at this level. But the plan goes further by ripping these out of partnership law entirely. This could have unintended consequences for “sweat equity” ventures.
- Small landlords, manufacturers, and family farmers will be hit by a tax increase that limits tax deferred rollovers of rental and business real estate to $500,000 per property. That’s yet another tax on the middle class.
- Finally, the Biden plan imposes a new “seniors and small businesses” 3.8 percent surtax on Social Security payments, 401(k)s and pensions, IRA distributions, and small business S-corp and partnership profits for those making more than $400k per year.