Joe Biden, the President of the United States of America, has been planning on making a proposal for capital gains tax. This will mainly double the rate of taxation paid by wealthy Americans on their returns on investment during the selling of stocks as well as other assets.
On the other hand, experts have mentioned that there is no need for investors to rush towards closing their deal before getting hit by this capital gains tax.
Double Taxation Under Capital Gains Tax
According to the proposal of Biden, the rate of capital gains tax is going to be at almost a value of 43.4% high. This might also include the ongoing Medicare surcharge.
Leon LaBrecque is an accountant along with being a professional financial planner for Sequoia Fin. The group is located in Troy at Michigan. According to him, these capital gains are expected to be the highest amount of tax income in the US.
Presently investors pay a top rate of 23.8% on the capital gains of the long-term. This also comprises 20% of assets taxation for over a year. In addition, the surtax of 3.8% on the total investment income will also be levied that was made by the Affordable Care Act in order to support the Medicare expansion.
The present law favors long-term capital gains in accordance with the wages of the Americans. Wealthy Americans pay a 37% top rate on their wage income. However, the White House is planning a 39.6% top rate. This will mainly apply to people whose annual income is over $1 million.
Biden also intends to keep a 43.4% Medicare surtax for long-term capital gain. This applies to 1-time taxpayers earning over $445,850 annually.
