Displaying items by tag: capital gains

Over a hundred and thirty nations have already consented to the global minimum corporate tax, and that number just got a little larger as all G20 came forward to endorse a 15% global minimum tax rate. This was a huge win for the Biden administration and secretary Yellen who have been strong advocates, but they still face hurdles with the domestic tax code in the Build Back Better bill. The administration said that the other G20 understand the minimum could take time with Republican opposition and Democratic infighting dominating congress, and the official timeline for the G20 will roll out at the end of the week. The other topic that is driving the G20 are the world's energy shortage which is on the forefront of everyone's minds, and how the world can come together to spur production.

FINSUM:The current form of the Build Back Better legislation aligns the U.S. with the global minimum and extends tax credits for millions of low-income Americans, but we’ll see if that makes it through the Congress at the end of the week.

Democrats are desperately looking for ways to pay for their pending spending packages and they just found a new way, taxes on unrealized capital gains. The new tax was introduced by Senator Ron Wyden on the finance committee and will only be applicable to those with over $1 billion in assets or $100 million in annual income. Dems say it's necessary to allow billionaires to just continually avoid paying taxes and accumulate capital while also raising funds. Those opposed see a slew of problems in collection and lots of ways to avoid the tax. Only about 700 Americans would necessarily qualify for the tax.

FINSUM: This is a lot of money, but the amount of oversight funds just to track down billionaires assets will be a major boon to the bottom line for the government.

(Washington)

The House Democrats’ update of the Biden Administration’s tax proposal hit airwaves yesterday, and it is just now starting to sink in. One of the elements that was immediately apparent to one senior tax professional was that the updated capital gains tax proposal is effectively a “marriage tax”, according to Nicole DeRosa, senior tax manager at Wiss. Note that increased rates (5% plus the 3.8% surtax) start at $400,000 of income for individual filers, but $450,000 for joint filers. Many times the joint filing limit would be double the individual limit, but in this case it is barely above. This effectively means married couples are being taxed for their matrimony.

FINSUM: This is illogical and unfair to married couples. Hopefully this does not make it into law in its current form.

(Washington)

Biden’s big ‘death tax’ has been spooking advisors and their wealthy clients for months now, and there are very major concerns over if and when it will be implemented. Well we have good news and bad news today. The good news is that both the House Democrats and the Ways and Means commission have put forth proposals with significantly lower tax rates than Biden’s initial budget. The House Democrats, for instance, would keep all-in capital gains taxes at a max of around 28.8% (counting the surtax). The bad news is that a recent adoption by the Ways and Means Commission puts the cutoff date for any company sales that would be affected by Biden’s much bigger capital gains taxes as Sept 13th (for sales with a binding contract prior to that date).

FINSUM: Overall, the direction of the proposals is getting more favorable for the HNW community, but there is still a LONG way to go.

(Washington)

Any advisor paying attention to President Biden’s new proposals has surely been aware…see the full story on our partner Magnifi’s site