Experts worry that President Joe Biden's American Job Plan could harm stock prices and the country's economic growth. | Facebook
Experts worry that President Joe Biden's American Job Plan could harm stock prices and the country's economic growth. | Facebook
President Joe Biden recently affirmed his plan to raise taxes on upper-class citizens in his “American Families Plan” to help struggling families lessen the country’s income gap.
The initiative’s opponents worry that raising taxes could harm stock prices and slow economic development.
"This morning I spoke with Hugh Hewitt about how President Biden's tax plan will affect working families. The promise of 'no taxes for those making under $400,000' is plainly false," Sen. Tom Cotton wrote in a Facebook post.
Those who earn an annual salary of over $1 million would earn capital gains of 43.3% in comparison to the current 43.4%. With state taxes included, they can rise to 48%. In addition, inherited assets worth more than $1 million would also run the risk of being taxed once its owner is deceased. The Institute on Taxation and Economic Policy, however, raises concerns about how only 0.7% of households would face tax spikes, with most of the pressure thrown on the wealthiest 1%.
A University of Pennsylvania Wharton Business School report indicates that federal tax revenues could lower, contrary to what’s intended, by $33 billion between 2022 and 2031, and could garner $124 billion in costs for the treasury over the next decade. An Axios report revealed that, once taxes collected from the wealthy taxpayers would skyrocket to 39.6%, applicable to individuals earnings more than $452,700 per year and $509,300 for married couples, indirectly raising the possibility of increasing taxes on citizens learning under the tax bracket.
Raising taxes could also derail the flow of new businesses, and middle-class households could potentially face higher taxes under select circumstances, such as a real estate inheritance. To raise revenue, the plan also calls for $80 billion spending to enforce payment requests upon those who have evaded taxes. The money will be allocated to low-income families, free community college and greater health insurance subsidies.
“The doubling of taxes would hurt the returns on private investment into venture capital and private equity funds,” said Mace McCain, chief investment officer at Frost Investment Advisors. “These funding sources have been a primary source of funding for new drug discoveries and technology innovation.”
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