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There’s a new budget proposal in town, and amongst a myriad of initiatives, such as infrastructure and education, it also includes additional tax increases on corporations and the wealthy. Read the article from The Wall Street Journal below.READ THE ARTICLE
The plan is ambitious, and a former Senate GOP budget aide even compares it to “the Roosevelt years coming out of the Depression.” Whether or not we see this come to fruition will depend on Congress, but both sides of the table are already relaying their response.
Those in favor: Democratic lawmakers believe the proposal provides funding for long-overdue investments, and that failing to make such investments in this low-interest-rate environment would be a historic missed opportunity.
Those against: On the other hand, Republicans view this plan as a major risk to stoking the inflation fire and adding to the mounting national debt. It’s projected that as a result, debt held by the public would climb to 111.8 percent in 2022, which surpasses the level seen following World War II.
As for taxes: Biden’s proposal relies heavily on both corporate and wealthy income household tax increases to support the infrastructure and education initiatives. Corporate taxes would climb to 28 percent (from 21 percent), the top capital-gains tax rate would rise to 43.4 percent (from 23.8 percent) and unrealized gains would be taxed at death, including a $1 million per-person exemption.
Prepare now: To quote my good friend, David McKnight, “…The tax train is coming, so get out of the way.” Eliminate as much as possible in tax-deferred assets now, so this becomes an irrelevant variable for you in retirement.