Biden Administration Tax Increases

The new Child Tax Credit enacted in the American Rescue Plan is only for 2021. That is why President Biden strongly believes that we should extend the new Child Tax Credit for years and years to come. That’s what he proposes in his American Families Plan.

White House American Families Plan

Right now, too many Americans are struggling to meet basic needs and cover basic expenses. An economy that fails so many of us is not only unfair, it’s unsustainable. The American Families Plan is a once-in-a-generation investment in the foundations of middle-class prosperity – education, health care, and child care. It recognizes that policies to make life easier for American families must focus on bringing everyone along: inclusive of gender, race, or place of residence – urban, suburban, or rural. Beyond helping American families meet the needs of today, this plan powers the innovation and growth of tomorrow.

Here’s what the American Families Plan will do:

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Biden's 'Death Tax' Will Harm Middle-Class Families Making Far Less Than $400K A Year

TaxConnections thanks the Westerm Journal for their permission to post this article written by Eric Nanneman.

For many moderate Americans who were afraid of voting for a traditional tax-and-spend Democrat, this assurance may have tipped the balance to win their vote.

But as Biden unveiled his American Families Plan — which promises two years of free community college education, 12 weeks of paid family and medical leave, expanded unemployment benefits and more — there was an ugly truth hidden near the bottom.

Death Tax’ Greatly Expanded

Currently, the estate tax exemption stands at $11.7 million, meaning that when an owner of an estate passes away, the heirs are only taxed on the amount exceeding $11.7 million, or $23.4 million for couples. So, if an unmarried son inherits a $20 million estate, he would pay taxes on $8.3 million.

Biden’s drastic plan cuts the $11.7 million exemption all the way down to $1 million.

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American Families Plan

According to Wikipedia, The American Families Plan is a proposal by U.S. President Joe Biden to significantly increase federal spending in areas related to childcare, paid leave, pre-kindergarten, community college and healthcare, funded by increased taxes on high-income Americans. It is the third part of Biden’s three-part “Build Back Better” agenda, with the first being the American Rescue Plan and the second the American Jobs Plan. It was unveiled on April 28, 2021.

It would be at least partially funded by a number of tax hikes on high-income Americans and investors, including restoring the top marginal income tax rate to its pre-2017 level of 39.6% and nearly doubling the capital gains tax for people earning more than $1 million, as well as eliminating a provision in the tax code that reduces capital gains on some inherited assets, like vacation homes. It would also raise revenue by boosting the budget of the Internal Revenue Service by $80 billion (distributed over ten years), which the White House estimates could raise over $700 billion in revenue that otherwise would have been lost to tax evasion.

(We ask the tax professional community and taxpayers to comment on this proposal for increased tax hikes. What do you think?)