Over the coming days there is expectation that President Biden will announce proposals to increase taxes on the wealthiest to fund social spending in the forthcoming ‘American Families Plan’. Biden will propose plans to almost double the capital gains tax rate for rich individuals to 39.6%, which, together with an existing surtax on investment income, means that federal tax rates for investors could be as high as 43.4%. The plan is to boost the capital gains rate to almost 40% for those earning more than $1 million, nearly doubling the current base rate of 20%. In addition, the 3.8% tax on investment income that funds Obamacare would be kept in place.
The president will lay out his full proposals for the American Family Plan next week. However, although some Republicans have shown willingness to negotiate with Biden on his infrastructure agenda, including spending on roads, waterways, and broadband internet, they have vowed to fight his tax plans.
If these proposals were to go through, they are still a long way from being rubber stamped, it could have major implications. We have noted before about the K-shaped recovery where governments have to support the ‘have-nots’ for longer whilst knowing such schemes are benefitting those ‘haves’ at the top of the pile. However, whilst supporting those at the bottom of the ladder, which of course is 100% the right thing to do, you must be careful that you don’t squeeze the haves too much. If they turn the spending taps off, it will be bad news for everyone.
Before we go, 16 years ago today the first video—which was of YouTube co founder Jawed Karim's visit to the San Diego Zoo—was uploaded on the YouTube Website; approximately one year later the site had some 100 million videos. Today 300 hours of video are uploaded to YouTube every minute and almost 5 billion videos are watched every single day. The most popular topic that is searched for is, no surprise, music and the most popular tutorial that is searched for is ‘How to kiss’.