Crisis periods, transitions from one normal to another, are usually felt most by those "in the middle" on their backs. It is not uncommon for the rich to get even richer in these murky and crisis times. That’s why the announcement of Joe’s move seems like a move that will make things somewhat positive. It is in fact an announcement that US President Joseph Biden will most likely propose a significant tax increase for rich Americans.
Thus, for the rich, the highest marginal tax rate would increase and taxes on investment profits would increase.
An increase in taxes would help pay for childcare and education, but not health services, the reports said.
The news was the trigger for the sale of shares on Wall Street, with the main indexes falling during the trading session on Thursday.
The White House said that the American plan on the family, which Biden is expected to present in full next week, will not affect families that earn less than 400,000 dollars a year.
"His position is that it should be on the backs of the richest Americans who can afford it, and corporations and companies that can afford it," said White House spokeswoman Jen Psaki.
The proposal would increase the highest marginal tax rate from 37 to 39.6 percent, the New York Times and Bloomberg reported.
That would change the decision of Biden's predecessor Donald Trump from 2017, which reduced the income tax for those who earn the most. The plan would also almost double capital gains taxes to 39.6 percent for those earning more than $ 1 million. That is a significant increase in the current rate of twenty percent. In some countries that determine the capital gains tax on their own, some investors could face an overall increase that exceeds fifty percent.
The plan is expected to meet strong resistance from Republicans in Congress. Although Democrats have a slim majority, they may not unanimously support the plan.
However, this news caused several earthquakes on Wall Street. No wonder, because the previous president implemented an economy that benefits investors and not ordinary citizens. We will see if this tax increase for the richest will be good and efficient enough.