An activist calls for federal taxes to be increased for wealthy and large corporations.
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If the Biden government prevails, wealthy households will face higher tax rates.
Many millionaires seem to be okay with this.
More than half – 60% – of those worth $ 1 million or more are in favor of a wealth tax on people worth $ 10 million or more, according to CNBC’s latest millionaires survey. And almost half (48%) are in favor of an increase in capital gains tax.
The survey, conducted online by the Spectrum Group on behalf of CNBC in April and May, included 750 respondents with $ 1 million or more in fixed assets.
Although President Joe Biden has not proposed a wealth tax per se, his proposed budget for 2022 includes some tax increases for well-heeled people to help fund the American Families Plan. This proposed legislation would expand the social safety net by, among other things, subsidizing childcare for middle-class families, granting federal-paid family leave, and expanding tax credits for children.
One way Biden is looking to fund this proposal is to raise the highest marginal income tax rate from its current 37% to 39.6%. According to the Treasury Department, this applies to individuals with taxable incomes greater than $ 452,700 and married couples filing a joint tax return in 2022 with incomes greater than $ 509,300.
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Biden also plans to subject millionaires’ capital gains to a 39.6% tax rate.
Those gains – the difference between the value of an asset when it is sold and when it is purchased – currently has a top tax rate of 20% if the asset has been held for more than a year (i.e. a long-term gain). Ordinary income tax rates already apply to short-term gains (for assets held for a year or less).
The tax rate would apply to taxpayers whose income exceeds $ 1 million (or $ 500,000 for couples filing separate tax returns), according to the Treasury Department. Combined with the existing 3.8% net capital gains tax that applies to high net worth individuals on the sale of valued assets, this would translate into a rate of 43.4% on capital gains.
The CNBC poll also showed that 58% of millionaires generally support an increase in taxes on companies to fund infrastructure improvements, as outlined in Biden’s other ambitious spending package, the American Jobs Plan.
Under this proposal, the corporate tax rate would increase from the current 21% to 28%. This lower rate was introduced under the Tax Cuts and Jobs Act 2017, a decrease of 35%. (Biden recently signaled his willingness to back off that 28%, according to published reports.)
While many respondents agree that taxes should rise for the rich and business, 73% think their own tax burden is fair – and 21% say they pay more than they are fair.
While most millionaires under the Biden administration expect higher taxes, 62% do not expect any changes to their finances as a result.