Capital Gains Tax Hike To Affect 0.3% Of Americans, Make System 'Fairer' - White House

WASHINGTON (UrduPoint News / Sputnik - 27th April, 2021) President Joe Biden's plan to raise the capital gains tax on the highest earning Americans will only affect 0.3 percent of the population and those making more than $1 million per year, a number that makes up less than 500,000 households, White House Economic Adviser Brian Deese said on Monday.

"This reform would be to change how we tax capital gains," Deese, who is also director of the National Economic Council, told a media briefing. "That's income from selling stocks and other assets for taxpayers that make more than $1 million per year in income. This change will only apply to three tenths of a percent of taxpayers, which is not even the top one percent. That's about 500,000 households in the country that we're talking about."

Biden, who will unveil details of the plan in his first speech to the joint session of Congress on Wednesday, has said he wants to raise $1 trillion per year to fund childcare, universal pre-kindergarten education and paid leave for workers, US media reported.

While the US president was only targeting a sliver of taxpayers with high rates, his aim was to establish a system that would be fair to all, Deese said.

"The tax rate for the highest earners now is lower than many middle-class families' tax rate.

This is the dynamic that led Warren Buffett to famously explain that he paid a lower tax rate than his secretary," the White House adviser said, referring to the top billionaire stock market investor. "It's the dynamic that has led the president and others to argue that we need to do something about equalizing the taxation of work and wealth in this country."

Deese said the last US president to significantly attempt to equalize the treatment of ordinary income and capital gains was Ronald Reagan, back in 1986.

"Of course, we will be raising to higher rates than in that reform, but a lot has also changed in the economy since then," Deese added

Big businesses are, however, vehemently opposed to any massive tax hike on capital gains, with the US Chamber of Commerce, which represents more than 3 million business owners in the country, vowing to defeat Biden's plan.

The US Treasury has separately announced plans to raise the US corporate tax rate to 28 percent from 21 percent as part of Biden's plan to fund a $2.3 trillion infrastructure program.

Republican rivals to Biden's Democratic Party in Congress have suggested that his infrastructure bill be no larger than $568 billion, or just about a quarter of what he proposed.