Almost every American president made adjustments to the country's tax system and the current one was no exception. US President Joe Biden decided to make good on his campaign pledge to revise taxation on the rich.
Biden proposed almost doubling the capital gains tax rate for wealthy individuals as a way to fund spending in the so-called American Families Plan. In other words, he is determined to provide poor households with additional support at the expense of the wealthiest ones. Taxes on millionaires, large companies, and corporations will be raised by nearly 2.5%. The top marginal income tax rate will be increased to 39% from 37%, while the capital gains tax rate will almost double. These adjustments apply to those who make more than a million dollars. The current base rate is only 20%. Coupled with a surcharge on investment income, the new tax rate for the wealthiest Americans could be as high as 43.4%.
This news exerted some downward pressure on the US stock market. Major indices slid on news on a tax hike. The S&P 500 fell by 0.92%, the Dow Jones Industrial Average dropped by 0.94%, and the Nasdaq Composite was down by 0.94%. Earlier, the head of the White House introduced a $2 trillion plan to overhaul the US economy. In early March, the US Senate approved a $1.9 trillion coronavirus relief package aimed at addressing the crisis.
