They say the only two guarantees in life are death and taxes. Under President Joe Biden’s new plan, not even the former can save you from the crushing effects of the latter.
Biden’s new budget proposal, intended to fund the American Families Plan, contains two intense tax increases, including estate and capital gains, which could reach up to 61 percent.
Long term capital gains of more than $1 million are currently taxed at 20 percent, with a 3.8 percent net investment income tax (NIIT) upon the investment being sold makes the rate functionally 23.8 percent. Under Biden’s plan, these gains would be taxed at the higher 39.6 percent, a level closer to income. With the NIIT added, capital gains’ top rates will face a combined 43.4 percent, higher than the initially proposed rate and nearly twice the current levels.
Under Biden’s plan, even dying will not save you from the brutal capital gains tax, as unrealized gains will face the 43.4 percent tax in estates.
White House Press Secretary Jen Psaki declared that “Nobody making under $400,000 a year will have their taxes increased” under Biden’s new tax plan, but the numbers tell a different story. Howard Gleckman estimated in Forbes that around 2 percent of Americans below the income threshold will face increased taxes from unrealized capital gains upon death.
If inheritances were not taxed enough already, Biden’s plan also increases the top level of estate tax to 40 percent, in addition to the aforementioned capital gains tax, forcing the same money to be taxed twice. A model by Tax Foundation shows that Biden’s plan has an effective rate of 61 percent on the top estates, a number nearly doubling the current rates.
Under Biden’s new plan, they’ll keep taxing you even after you’re dead.