Sun. Dec 5th, 2021

The New York Stock Exchange (NYSE) in New York.



Photo:

brendan mcdermid/Reuters

President

Biden

really is a class warrior. Not only does he want to raise taxes on capital gains to a modern high of 43.4%, he wants to do it retroactively. The Administration leaked Thursday that its new high rate would apply to all gains on assets sold after the introduction of its American Families Plan in April.

So much for giving investors a chance to plan. Most significant tax changes are prospective, beginning on Jan. 1 of the next year.

Bill Clinton’s

increase in 1993 was an exception, giving rise to the quip “no taxation without respiration” in case the dearly departed had to pay up even if they died that year. Team Biden apparently wants to visit similar retroactive tax joy on families this year.

Investors didn’t overreact Friday to the news of this tax sandbagging, and perhaps they’re figuring Democrats in Congress will save them from the higher rate and the retroactive date. They shouldn’t count on it.

The main priority of many House Democrats is restoring the state-and-local (SALT) tax deduction. They may be happy to acquiesce to the White House and progressives on capital gains, if Speaker

Nancy Pelosi

will make concessions on SALT. To Democratic progressives these days, a retroactive tax is a form of social justice.

Main Street: The Democrats’ proposed tax deduction for the rich puts the Vermont socialist and low-tax Republicans in the same foxhole. Images: Getty Images Composite: Mark Kelly

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Appeared in the May 29, 2021, print edition.

By rahul