A former senator from North Dakota, Heidi Heitkamp, expressed skepticism on the Joe Biden-led administration’s proposed 44% capital gains tax, stating it has no chance of passing.
What Happened: President Biden’s proposal to increase the capital gains rate to 44.6% in the Fiscal Year 2025 Budget has sparked significant discussion.
The main proposal is to raise the long-term capital gains and qualified dividends rates to 37% for taxpayers with taxable income above $1 million, Forbes reported. The 44.6% figure would only apply if an additional proposal to increase the net investment income tax rate by 1.2 percentage points for income above $400,000 is also approved.
Therefore, the 44.6% rate is not a blanket increase but would only affect individuals with taxable income above $1 million and investment income above $400,000. This is a strategic policy maneuver, focusing on high earners rather than small-business owners.
The policy aims to level the playing field between high ordinary income and investment income earners.
However, on Thursday, Heitkamp expressed her doubts about the proposal during CNBC’s “Last Call,” calling it “a political document.”
"He wants to make the point that he's advocating for higher taxes on billionaires. He did this in this document. But there's no chance this is going to pass,” she said.
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Why It Matters: The Biden administration has been pushing for higher taxes on the ultra-rich, a move that has been met with mixed reactions. Last year, Democratic representatives reintroduced a Biden-backed bill that seeks to issue a levy of 25% on the wealthiest Americans, including unrealized gains on stocks, bonds, and real estate. The legislation, if passed, could reduce the fiscal deficit by $3 trillion over ten years.
Notably, some billionaires, including Warren Buffett, chairman of Berkshire Hathaway Inc. have publicly supported higher taxes on the super-rich. Buffett has previously criticized Congress’s leniency towards billionaires and called for a more equitable tax policy.
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