It is understood that as early as the 2020 Biden election campaign proposal, there is a tax increase plan. This tax increase plan is not only for enterprises, but also for the wealthy to increase taxes.
Recently, according to media reports, a person familiar with the situation revealed that Biden will formally propose a tax increase plan next week. This plan proposal is mainly aimed at the wealthy people with an annual income of not less than 1 million yuan. The capital gains tax rate is 39.6%, which is higher than the current rate. The 20% tax rate has nearly doubled, plus the existing 3.8% investment income surcharge, which means that the wealthy may face a capital gains tax of 43.4%.
What is capital gains tax?
Capital gains tax is a kind of temporary tax, which refers to a tax levied on the realized capital gains of taxpayers who are not specialized in the sale of real property and valuable securities.
The capital gains tax increase plan is undoubtedly a great negative for the U.S. stock market. As soon as this news came out, U.S. stocks fell sharply at the opening. The three major stock indexes all closed down about 1%. On the other hand, Bitcoin fell nearly 6%. Once dropped to around $50,000, Bitcoin’s fall is the first time its share of the cryptocurrency market has fallen below 50% in two years.
It is understood that if Biden’s tax increase plan is implemented this time, some capital gains taxes that were originally taxed may exceed 50%. Among them, New York and California will bear the brunt. The Biden administration’s view on the tax increase is to increase Capital gains tax will not have a negative impact.
However, many professionals still believe that Biden’s increase in the capital gains tax rate will stimulate selling. A large number of investors will reduce their positions in order to avoid higher capital gains taxes, leading to a large number of stocks being sold in the stock market. As a result, the value of the stock fell sharply.
Some professional organizations also said that the plan will cause greater turbulence in the market. The increase in capital gains tax will have a greater impact than the increase in corporate tax. Investors’ investment methods may change, and the investment market may experience a significant cooling in the future. .
Although many people think that Biden’s tax increase is not surprising, they did not expect the tax increase to come so fast, and the tax rate increase is so high, which many people did not expect.
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