Finance: Biden is concocting a 44.6% capital gains tax for the rich

In his fight for wealth redistribution, Joe Biden draws a new weapon: the taxation of long-term capital gains. A well-chosen target: those who manage more than one million dollars. An announcement that shakes the finance and cryptocurrency aficionados, far from going unnoticed.

Taxing the Rich: Biden Plays the High Numbers Game

Like a chess player on the political board, Joe Biden does not back down in his struggle for power. In a country where wealth rubs shoulders with debt, the American president spares no effort to woo voters for the upcoming November elections. And for this, he is willing to use the dreaded weapon of tax increases, even if it means alienating the elites for the benefit of the less fortunate.

JUST IN: President Biden proposes increasing capital gains tax rates to 44.6%, the highest since 1922.

Currently, the highest long-term capital gains tax rate is 20%.

He has also proposed a 25% tax on unrealized capital gains for wealthy individuals.

Should this be approved? pic.twitter.com/Ue3GboIHAA

— The Kobeissi Letter (@KobeissiLetter) April 24, 2024

In the budgetary labyrinth of 2025, a proposal resonates like a fiscal thunderclap: Biden is considering a capital gains tax rate of 44.6%. However, behind this spectacular number lie important nuances.

This colossal rate would result from two separate proposals: first, an increase in the ordinary rate to 39.6%, and then an additional increase of 1.2 percentage points for investment income beyond 400,000 dollars. But in reality, only taxpayers with taxable income exceeding one million dollars would see their rate capped at 37%.

This strategic highlight of the maximum rate seems aimed at mobilizing public opinion while avoiding upsetting economic elites. A tactic that, behind the strong figure, cleverly masks the specific income thresholds targeted.

Biden and Taxes: The Big Number Hiding Financial Nuances

The specter of a 44.6% tax on capital gains and a 25% tax on unrealized gains looms over social media. Yet, these measures are not as catastrophic as they seem.

Biden’s widely reported proposal would only apply to taxpayers with over 100 million dollars in net assets. A crucial detail, often forgotten in the tumult of fiscal debates.

The origin of this imposing figure dates back to March 11, with an explanatory document from the Treasury Department. But beware, this colossal rate would only be activated if two separate proposals are approved: one aimed at increasing the highest ordinary tax rate, and the other at increasing the tax rate on investment income.

Despite the alarmist cries, the majority of workers will not be affected. The real targets of these tax measures are high-income earners, starting at 400,000 dollars, or even 1 million dollars. A strategy that spares the average cryptocurrency user (BTC, ETH, etc.), according to experts.

As controversy swells, one certainty remains in the world of finance: for most of us, these tax reforms will hardly change our financial everyday life.