Biden’s Plan to Raise Federal Taxes

tax hike

For those of us who have been wondering how the stimulus packages are going to be funded, well, we now have some answers.

On Monday afternoon, White House press secretary Jen Psaki confirmed President Biden’s initial campaign promises to hike corporate and personal tax rates via an ambitious infrastructure, jobs, and clean energy package.

The soon to be proposed package comes after Biden’s most recent $1.9 trillion COVID-19 stimulus bill, one of the largest stimulus measures ever passed in US history.

The jobs and clean energy package is set to raise corporate tax rates by 7%, from 21% to 28%, increase the income tax rate for individuals earning more than $400,000 annually, and raise capital gain taxes for those earning more than $1 million per year.

Shockingly, the new package is proposing to reduce benefits for pass-through businesses like LLCs, which could be detrimental for small businesses, start-ups, and solopreneurs.

This would be the first major tax hike in close to 30 years.

To some, this might sound like a suitable solution; however, they may be missing some crucial points to consider.

When large corporations (for many, that includes their employers) are not as profitable, they could end up cutting jobs.

In fact, according to a recent analysis from the Tax Foundation, 159,000 jobs are estimated to be lost due to increasing the corporate tax rate from 21% to 28%.

The Tax Foundation also estimated that the hike would reduce long-run economic output by 0.8% and reduce wages by 0.7%.

Even Democratic leader of West Virginia, Sen. Joe Manchin, said he would not support this proposal if it did not have bipartisan support.

Like most of us, he believes that the nation’s skyrocketing debt could cause “a tremendous deep recession that could lead into a depression if we’re not careful.”

Historically, this has been gold’s time to shine. And no, going to your local market to purchase physical gold is not the only way to begin diversifying your portfolio into the precious metal.

A Gold IRA, also known as a Self-Directed IRA, is a great vehicle that allows you to save for retirement on a tax-advantaged basis with the same IRA contribution limits as a Traditional IRA or Roth IRA.

The difference is a Gold IRA provides absolute freedom and control to decide how and what assets to own.

We are only two months into the new president’s term and no one knows what other massive changes could be in store for us and how it will affect our economy.

Call American Hartford Gold at 800-462-0071; we were founded for times like these.

Get Your Free 2024 Guide
Most Recent News