The increase of taxation in the United States in 2021 was relatively easy to predict. Biden was not hiding his intentions even before he got sworn in and took over the Presidential seat in the first days of the new year.
Trump was campaigning for lowering the taxes, and he even succeeded to make some of his words come true. But were those actions really in line with what society needed? The Democrats must have noticed the widening gap between the poorest and the richest. And they used it in their campaign. Now they are trying to tighten it, while also trying not to get devoured by the post-Covid-19 inflation and financial crisis. That is why most of their newly-implemented policies will be targeted in the wealthiest percentile of society.
Maybe the relationship between Washington and Wall Street has deteriorated a bit in the last years. There has been some scandals along the way, Hillary Clinton’s one for example, when it became public, that she received $600,000 from Goldman Sachs for giving a private speech.
But what really is this Tax Plan?
The main fuss centres around the raise of Capital Gains Tax from current 20% to even up to 43.4% But this will only be applicable to people earning more than $1 million, which of course changes things drastically. Everybody else can keep on going undisrupted.
The corporate rates are supposed to rise up to 28% (from the current 21%), but this is exactly what Biden was promising last year during his campaign. There have also been proposals of introducing another tax for families earning more than $400,000 per one year.
This ‘new money’ will not be wasted, as Biden has already proposed the plan of investing them back to society. To find out about Joe Biden's widely-spoken pandemic relief plan, his plans to invest in family support, and infrastructure, and Wall Street’s reaction, use the following link and read the comprehensive Andy Samu’s piece on Disruption Banking: https://disruptionbanking.com/2021/04/29/how-bad-is-bidens-tax-plan-for-wall-street/.