Wealthy Americans seek to escape Biden’s tax hikes
Wealthy investors are increasingly concerned about the possibility of impending tax hikes as Congressional Democrats move forward with a plan to dramatically raise rates for affluent corporations and wealthy Americans.
President Biden on Thursday unveiled a revised framework for an estimated $ 1.75 trillion ($ 1,750,000,000,000) spending program, which would be paid for by a host of new taxes, including a minimum corporate tax. 15%, a new surtax on 0.002% of Americans, a stricter IRS enforcement of tax laws, taxes on corporate buybacks and higher taxes on foreign profits of American companies.
But a new survey released by UBS Global Wealth Management questions the effectiveness of those increases: According to a survey of 3,000 investors and 1,200 business owners with at least $ 1 million in assets, a large some of the people questioned are thinking about how to move their money. before the increases take effect.
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While about half of investors said they supported Biden’s tax proposals, many said they wanted to make a “smart move” before the rate hikes spill over into their portfolios. An estimated 40% of U.S. investors value changing assets that don’t generate adjusted gross income, while 36% have already moved some assets into trusts before the potential changes.
On top of that, 34% of investors increased financial giving to family and friends, a popular way to lower taxes, and 39% said they sought advice from a tax expert.
Although the White House initially proposed large increases in corporate tax, capital gains tax and income tax, most of these plans appear to have fallen through the cracks. after the retreat of Senator Kyrsten Sinema, D-Ariz. The majority of the tax law signed by former President Donald Trump in 2017, which drastically lowered rates for businesses and affluent Americans, will likely remain intact in the latest Build Back Better plan.
“The plan is more than paid off by asking the richest Americans and the most profitable businesses to pay their fair share. It does not raise taxes for small businesses and anyone making less than $ 400,000 a year.” the White House said in a backgrounder. . “It will also generate economic growth which will increase tax revenues and help reduce the deficit.”
One of the more recent aspects of Biden’s plan is the revamped surtax on the ultra-rich: it would impose an additional 5% rate on people with incomes above $ 10 million. That rate would climb to 8% for people with incomes over $ 25 million – in addition to the currently highest personal tax rate of 37%.
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The White House has estimated that the proposed tax hikes could generate around $ 2 trillion in new revenue over the next decade, although Penn Wharton analysts found the figure to be actually closer to $ 1.5 trillion.
The money generated from the tax hikes would be used to fund a massive expansion of the social safety net, including the creation of a universal kindergarten, the extension of Medicaid and the provision of energy tax credits. own. The spending plan notably excludes big progressive initiatives such as free community college and paid family leave.