There are a lot of questions being asked about Biden’s Build Back Better plan and potential tax law changes, including an adjustment to capital gains taxes. These capital gains taxes will not only be detrimental for the "wealthy", which they deem as households making over $400,000, but also start to effect individuals in lower wages.
One of the proposals Congress is considering sets the top rate for taxing capital gains at 25%, up from 20% under current law. Another would raise the capital gains tax rate to 39.6% for taxpayers earning $1 million or more. Still another would make the change to capital gains tax retroactive, with a start date of April 2021. This tax increase would allow the velocity of money to slow down, creating a negative impact on the lower class. When you start taxing the people that create jobs and goods more, they have less money to pay their employees, offer raises, and hire new employees.
At this point, many ideas are being considered as legislators look for ways to raise revenue to help pay for the Build Back Better plan. Corporate tax rates, individual tax rates, estate tax rules also are on the negotiating table.
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