Earlier President Joe Biden had said that in a speech over joint Congress session that he would be reversing Trump’s tax cuts for the wealthy to pay for a huge middle-class spending program. He by mistake left out a keyword during the speech which turned his intentions completely in the media. It so came out that the President was going to raise the taxes for some people. While people earning less, wouldn’t have to pay any taxes. Thus, President Biden reiterated his speech saying that Americans earning less than $400,000 would not pay “a single penny” in additional taxes.
The tax balance
A misconception was raised because the people claimed that President Joe Biden had said that people earning less than $400,000 would not have to pay a single penny as taxes. Whereas, what actually happened was that Biden said people earning less than $400,000 wouldn’t have to pay additional taxes.
The main agenda behind the tax cuts is that the President wants to make rich people pay higher taxes. He wants to remove the stepped-up basis provision, it allows every individual who inherits property and assets, can immediately sell it and pay no taxes which come along with it. This happens because the cost basis of the property is “stepped up” from the price the deceased owner already paid on the day it was inherited.
With the taxes scheme this loophole will be eliminated which is gain up to $1 million which will be used in spending programs like health, childcare and education. In his speech, Joe Biden said that it’s time for the rich Americans to pay their share.
How will the money be used?
The $1.8 trillion American Families Plan focuses on education and child care as President Biden claims. The American Jobs Plan is a $2 trillion dollar investment that includes the nation’s infrastructure and childcare plans. Bothe these plans as of now rely on the tax hikes on businesses.
There is supposed to be an increase in the corporate tax rate to 28% from 21% circumscribing The American Jobs Plan. The proposal would also increase the capital gains tax for every individual earning $1 million to 39.6%.
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