Biden's Capital-Gains Tax Hikes Would Hit Few Americans
Affluent Americans are worried about President Biden’s proposed tax changes on capital gains from stocks, bonds and other assets. But those proposals would hit a sliver of taxpayers, according to a new analysis.
Financial advisers to the wealthy have been fielding calls from anxious clients since the plan was unveiled last week. Many are already deploying a range of tax-reducing strategies in anticipation of the increases, advisers told The Wall Street Journal. But key changes would likely affect only the very wealthy, according to Robert McClelland, a senior fellow at the Tax Policy Center. a joint venture between the Urban Institute and the Brookings Institution.
The Biden plan would increase the top capital-gains tax rate to 43.4% from 23.8% for those earning over $1 million. Capital gains refer to profits on the sale of assets like stocks, homes or small businesses.
Of taxpayers who filed Schedule D, the form for reporting capital gains and losses, only 2.7% had adjusted gross income of $1 million or more in 2018, according to Mr. McClelland’s analysis of Internal Revenue Service data. However, that group of taxpayers accounted for 62% of capital gains, Mr. McClelland said.
“A small amount of people are going to end up paying it, but it could potentially affect a lot of the capital gains,” he said.
Published at Wed, 05 May 2021 09:30:00 +0000
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