As part of his American Families Plan, Biden is proposing to nearly double the top tax rate on capital gains and eliminate the « step-up in basis. »
Wealthy families could face combined tax rates of as much as 61% on inherited wealth under President Joe Biden’s tax plan, according to a recent analysis and tax accountants. As part of his American Families Plan, Biden is proposing to nearly double the top tax rate on capital gains and eliminate a tax benefit on appreciated assets known as the « step-up in basis. » Combining the estate tax, the new higher capital gains rate and the repeal of step-up in basis could bring total effective marginal rates as high as 61%, according to an analysis from the Tax Foundation. The rate would be the highest such rate in nearly a century, according to the tax policy research group. « It’s a big number, » said Brad Sprong, KPMG partner and private enterprise tax leader. « That’s why we’re telling our clients to be smart and start preparing now. » It’s unclear whether Biden’s plan can pass Congress, even with changes. Many moderate Democrats are likely to push back against his proposal to raise the capital gains rate to 39.