US President Joe Biden has been set to unveil a proposal as early as next week to raise taxes on wealthy individuals in bids to finance major investment plans in child care, universal pre-kindergarten education alongside paid leave for workers, a Bloomberg News report published earlier on Thursday had unveiled citing unnamed sources.
In point of fact, latest Biden Administration proposal to almost doubling tax rates for wealthy Americans that bolted out of the blue and sent shockwaves across global equity markets, has been widely practiced among emerging market economies, but such kind of approaches from a US Government would have long-running repercussions such as an abrupt rise in Treasury bond yields alongside a rush in capital outflows from equity markets, as major investors would more likely to try to evade an unprecedented scale of hike in taxation through several alleyways, suggested analysts.
Biden will propose tax hike on wealthy individuals next week
On top of that, the Bloomberg News report had also quoted sources familiar with the proposal as saying that Biden’s proposal would involve a hike in marginal income tax rate to 39.6 per cent from a previous 37 per cent while raising taxations on capital gains to 39.6 per cent for Americans earning over $1 million.
Besides, sources had also added that the Biden Administration was still finalizing the details of an “American Families Plan,” however, the President had decided to announce the tax hikes next week before his first address in the US Congress on next Wednesday.
Nevertheless, Biden’s latest proposal to hike wealthy individual’s tax rates, must be approved in a deeply divided US Congress before coming into being. According to Biden’s latest proposal to hike tax rates, Americans might face off an overall tax rate of 43.4 per cent including a 3.8 per cent in additional taxation for the individuals earning more than $200,000.
At this point, people earning above $200,000 have been laying off about 23.8 per cent in taxations including the Obamacare net investment tax.