‘We should raise the tax back to 39.6 percent instead of 20 percent…’
(Dan E. Way, Liberty Headlines) If elected president, former Vice President Joe Biden, the current Democratic front-runner, would nearly double the current 20 percent capital gains tax rate.
“The capital gains tax should be at what the highest minimum tax should be,” Biden said Wednesday on Iowa Public Television. “We should raise the tax back to 39.6 percent instead of 20 percent.”
As Investopedia explained, “Capital gains tax is paid on income that derives from the sale or exchange of an asset, such as a stock or property that’s categorized as a capital asset.” That differs from the income tax, which is extracted from interest, dividends, and employment.
Long-term capital gains are taxed at zero percent, 15 percent or 20 percent, depending on income level.
There are plenty of economists who are wary of using capital gains taxes.
The Tax Foundation argues it is a form of double taxation that harms the economy by encouraging immediate consumption over savings.
Americans for Tax Reform roasted Biden’s proposal.
“Raising the capital gains tax would harm Americans’ ability to build a nest egg and hurt the value of their homes, farms, and businesses,” the tax watchdog organization said.
But Biden isn’t a lone wolf on the issue. Leftist billionaire and Microsoft founder Bill Gates is among those who believe the capital gains tax should be raised to punish financially successful Americans.
Biden’s proposal should be no surprise to those familiar with his voting record in the Senate.
Americans for Tax Reform reminded that Biden voted in 2003 against the reduction in the capital gains rate from 20 percent to 15 percent. In 2005 and 2006, Biden voted against extending the 15 percent rate.
While he was vice president, Biden and President Barack Obama ardently supported a reversion of the capital gains rate to 20 percent.
Then they used Obamacare to layer on another 3.8 percent capital gains tax hike on the Net Income Investment Tax that became effective Jan. 1, 2013, raising the rate to 23.8 percent. Biden’s proposal would inflate that to 43.4 percent.
All of the Democratic presidential candidates promised in a primary debate they will raise taxes to pay for their radical social agendas. The personal finance magazine Kiplinger broke down each of the Democratic candidates’ cocktail of tax hikes.