‘Economic suicide’: Biden admin justifies tax hike based on racial criteria

The Biden administration’s analysis of its revenue proposals for fiscal year 2025 argues targeted tax hikes that disproportionately affect white people would ease racial wealth inequality.

Increasing taxes on capital gains and income-based wealth would reduce racial wealth inequality for black and Hispanic families, the Treasury Department outlined in the analysis published in mid-March. The Treasury points out that white families disproportionately hold assets subject to capital gains tax or are in a higher tax bracket, meaning a hike in those taxes would benefit black and Hispanic families.

The Biden administration argues for taxing capital income for high-income earners at “ordinary rates,” increasing the top rate from 37% to 39.6% for those who earn more than $1 million a year. Taxes on net investment income would also be hiked by 1.2 percentage points to 5% for those who make over $400,000 per year, bringing the total top marginal rate to 44.6%.

“Taxing capital gains at 44.6% at the federal level — not to mention state taxes — would be economic suicide,” Preston Brashers, research fellow for tax policy in the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Before the tax ever took effect, investors would rush to pull their money out of equities subject to such exorbitant tax rates. U.S. businesses would be starved for capital, and business activity would slow to a crawl. Ultimately, corporate income and capital gains income would fall off a cliff, so the net result would be less tax revenue, not more. The middle class and working class would be slammed with mass layoffs and lower real wages.”

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