Biden is planning a massive shift in tax policy. For rich Americans who are worried about higher taxes, the future is looking bleaker.
For generations, presidents and lawmakers have rolled carpets for the wealthy billionaires and millionaires. But now, that Biden is in power, the administration will target them for more levies.
This shift might be harsh for the investors who got used to paying a top rate of 23.8% on their capital gains.
These people will certainly adapt to new rules with the help of their advisors.
“We’re not going to evade taxes, but we’re going to avoid them and defer them as much as we can,” Bill Schwartz, managing director at Wealthspire Advisors, said in an interview. “We’re only beginning to explore. Give us a year or two and we’ll find ways around things.”
Wealthy Americans were warned that President Biden and the Democrats in Congress want to increase their taxes.
According to sources, Biden plans to nearly double the taxes on capital gains, to 43.4% for those who earn $1 million or more.
Massive Shift
For a long time, Presidents and Congresses have been following economic orthodoxy. This insisted that low taxes encouraged economic growth.
But with the help of a new generation of economists, we got to know that those theories were flimsy.
Over the last few decades, taxes have not juiced the economic growth of the country. Even if they coincided with soaring income and wealthy inequality.
James Bertles, managing director at Tiedemann Advisors in Palm Beach, Florida, said in an interview – “most people think taxes are going to go up — it’s inevitable. We just don’t know which taxes are going to go up.”
And if Biden is successful, all these Wall Street and investors would have to face marginal income tax rates north of 50% in high-tax states.
