Washington: U.S. President Joe Biden plans to raise capital gains taxes for households earning more than 1 million U.S. dollars a year as part of a plan to invest in American families, a top White House economic advisor said Monday.
“This change will only apply to three tenths of a percent of taxpayers, which is not the top 1 percent. It’s not even the top one half of 1 percent,” Brian Deese, director of the White House National Economic Council, said at a press briefing.
“For the other 997 out of 1000 households in the country, or the other 150 million households in the country, this is not a change that will be relevant,” he said.
Deese noted that the principle of the proposed tax increase is to “equalize the treatment of ordinary income and capital gains.”
“So for people making less than 1 million dollars a year, about 70 percent of their income comes from wages. But for those making more than 1 million dollars, for the top three tenths of a percent, it’s the opposite. About 30 percent of their income comes from wages,” he said.
Deese also said that there is “no evidence of a significant impact” of capital gains rates on the level of long-term investment in the economy.
“We believe that it’s not only fair, but it would also help to reduce the kinds of tax avoidance that significantly undermines trust and fairness in the tax code itself. And importantly, the revenue from this provision would help invest directly in our kids and our families and our future economic competitiveness,” he said.
Biden is set on Wednesday to unveil his “American Families Plan,” a wave of new spending measures on children, families and education that would be funded in part by higher taxes on the nation’s wealthiest households.
Biden is expected to propose almost doubling the capital gains tax rate for wealthy individuals to 39.6 percent from the current base rate of 20 percent, according to Bloomberg News.