U.S. President Joe Biden Seeks to Double Capital Gains Tax
Posted on 03/09/2023
U.S. President Joe Biden is set to propose a series of tax increases on investors and high-earning Americans in his annual fiscal 2024 budget plan request to Congress. Biden wants to roll back Donald Trump’s tax cuts and double capital gains and clamp down on crypto wash sales. Biden proposes almost doubling the capital gains tax rate from 20% to 39.6%. This would mark the highest capital gains tax rate since 1978. It would impact investors making at least US$ 1 million to pay that 39.6% on their long-term investments, which are currently taxed at a 20% rate.
The spending plan comes as Republicans and the White House are locked in a standoff over raising the debt ceiling. Republicans hold a majority in the House, with the Democrats controlling the Senate.
In addition, Biden calls to raise corporate tax rate to 28% from 21%. The plan reportedly aimed at reducing the deficit by almost US$ 3 trillion over the next decade.
Crypto
The Biden administration reportedly wants to apply the wash sale rule to crypto. This would end a strategy in which a trader sells and then immediately buys digital assets for tax purposes. This is known as tax-loss harvesting. Such a strategy is not permitted when stocks and bonds are involved under current wash sale rules.