Washington, DC – The Tax Foundation, a leading non-partisan economic think tank, has calculated that President Biden’s proposed taxes would increase taxes on wealth to over 61%. President Biden has proposed a number of tax hikes aimed at bringing in more revenue for Democratic spending proposals. The Tax Foundation and other independent economists have shown how these proposals could kill up to a million jobs in the US economy. The previous administration’s low tax and regulatory policies led to a thriving economy, record-low unemployment for women and minorities, and soaring markets, even against the headwinds of imposing heavy tariffs. The Tax Cuts and Jobs Act, enacted in December of 2017, lowered taxes across the board on individuals and businesses. The Biden administration has proposed going the opposite direction in creating a new death tax through capital gains due at death, raising the capital gains rate over 40% for some households, raising the corporate tax rate, and changing “step-up in basis,” which helps businesses continue through multiple generations.
The table below lays out how the Biden administration’s proposed tax hikes could mean a 61% effective tax for some taxpayers.
Congress is now gearing up to consider both the administration’s American Families Plan and American Jobs Plan, which includes nearly $4 trillion in new spending financed by a number of tax increases. If all of these tax increases became law, family-owned and operated, businesses will face a much heavier tax burden when attempting to pass to the next generation of ownership. Inventory heavy businesses, farmers, and ranchers who have the entire value of their business tied up in land and equipment will likely not have enough cash on hand to pay 61% of their businesses to the government at death, causing more consolidation of family businesses into larger multinational firms – the exact opposite of the intended effect of the death tax. AMAC Action will continue to keep you updated on the latest news and economic statistics on the administration’s policy proposals.