A Review Of President Biden’s Tax Policy Proposal

Abstract

Wealth inequality has quickly become a core talking point for the Democrats, highlighted by the Biden administration's promise of “rewarding work, not wealth”. The ever growing gap between the lower, middle, and upper classes has only become more apparent both in day to day life, and especially within political rhetoric. Recognition of this disparity has led the Biden administration to suggest a tax code that taxes the top long term capital gains bracket at the same rate as the top income tax bracket. Historically, capital gain tax rates have always been given preference over income taxation, and therefore the new proposal has garnered plenty of attention. Proponents of the policy point to the ever increasing value of capital, and the stagnation of wages. Detractors believe the risk inherently involved in every investment must be taken into account, and thus those risks ought to be compensated, or else the investment economy is at risk. The analysis shows that this proposal to equalize rate is profound and may impact and unsettle the democratic voting base to a significant extent.