The Biden Administration Proposes Tax on Unrealized Capital Gains With ‘Build Back Better’ Plan
Treasury Secretary Janet Yellen has proposed a tax on unrealized capital gains.
Speaking on CNN’s “State of the Union” over the weekend, Yellen said this new tax would be levied on the very wealthy.
“It’s not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals.”
Capital gains tax incurs on the profit that investors realize on the sale of their assets. The current capital gains tax rate is up to 37% in the US, based on the asset type, the income of the investor, and the period of holding.
But now, the former Chair of the US Federal Reserve wants investors to pay a tax on the increase in value of an asset every year, even if it is not sold.
It’s almost as if, after corralling savings for retirement into stocks via liquidity pumping and then ZIRP, Yellen and ilk were now trying to destroy everyone not-rich, as part of some, idk, “great redo” or “better built back to the centrally planned future”. This won’t end well. https://t.co/Lgnez7bkDP
— BrendanEich (@BrendanEich) October 25, 2021
The Democrat administration in the US claims only to target the super-rich with this tax. Yellen explained,
“I wouldn't call that a wealth tax. But it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals, and right now escape taxation, until they're realised, and often they're unrealised in the death benefit from a so- called step up of basis.”
With this tax, the Biden administration is looking to fund a $3.5 trillion spending plan. Yellen first proposed the tax on unrealized capital gains earlier this year in February.
Since then, wealth managers like Howard Marks, who revealed in January that his family “owns a meaningful amount” of Bitcoin, have argued that this may lead to more investments in markets outside the US to escape the added tax. BTC 3.34% Bitcoin / USD BTCUSD $ 30,069.79
$1,004.333.34% Volume 34.12 b Change $1,004.33 Open $30,069.79 Circulating 19.04 m Market Cap 572.66 b 4 mon SEC Commissioner says NFTs Might Fall Within Their Jurisdiction, Gensler Hires Senate Aid for Crypto Policy 4 mon A Possible Crypto Recovery Moving Into New Year, Risk-on Sentiments Send The Stock Market to Another Record High 4 mon Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum
Crypto market participants also voiced out against this move by the Biden administration. Charles Edwards, the founder of Capriole Investments, commented,
“They know they can't stop printing. They know increasing interest rates will break the economy. I expect to see more and more taxation plays in an attempt to control the debt balloon and hyperinflation.”
— Wayne Vaughan (@WayneVaughan) October 25, 2021
The tax would apply to those who make more than $100 million a year for three years in a row or $1 billion in annual income. Those impacted by the tax would be able to take a deduction if their assets plunge in value.