American investors will pay more than 50% of the tax?

We have complained more than once that we have to pay capital gains tax. You have to pay for profits on the stock exchange, money earned on investment funds, and even for microscopic interest on bank deposits. "Belka's tax" it's still nothing compared to the plans of the American administration. 

The Dow Jones index fell by 22 points, or 2021%, on Thursday, April 321,41, 0,94. This is the effect of information on additional taxes that appeared in the media space. 

US30 Chart (CFD on the Dow Jones Industry Average), M39. Source: xNUMX XTB xStation

Twice the tax for millionaires

Currently in the USA the richest pay 20% of tax on capital gains. However, recently elected president Joe Biden wants to change that. The burdens are expected to affect mainly those who are doing the best. Capital gains tax rate for individuals, that earn over $ 1 million a year would be as high as 39,6%. This is practically twice as much as today. Let us remind you that in Poland, the so-called Belka's tax, i.e. capital gains tax, is flat-rate. We all pay jointly and severally 19% and the same rate has been in force since 2002. 

The Americans, however, are expected to pay much more. 39,6% of tax for the richest is not everything. There are also other fees to be added. There is also a tax on federal investments in the US. Much depends on where you live. Bloomberg has just calculated that New Yorkers earning over $ 1 million a year will pay 52,22%, and California millionaires will pay even 56,7%!

The stock market surprised and terrified

It didn't take long for the stock market to react to this news. Thursday's trading ended abruptly. The Dow Jones index fell by 22 points, or 2021%, on April 321,41, 0,94. S&P 500 index However, it lowered the quotations by 38,44 points. or 0,92%.

We will know the facts at the beginning of next weekbut the financial market - as usual - reacts in advance. Especially since the information comes from proven sources and is cited by reputable agencies that rarely allow themselves to spread unverified news. 

The tax increase itself is related to the announced program "American Families Plan". Its financing is to be based on new levies collected from investors.

Current US Capital Gains Taxes

Capital gains tax is not flat in the US. There you pay according to PIT rates, i.e. depending on overall income. If the investment lasts over a year, you choose (depending on how much you have earned on it) one of the three rates: (0%, 15% and 20%). Interestingly, the rates depend not only on the income, but also on whether the investor has a wife / husband. The highest taxes are paid by singles, for whom exceeding the first threshold begins after reaching a profit of 40,4 thousand. USD per year. Spouses must double as much, i.e. 80,8 thousand. USD per year in the capital market to enter the second tier of 15%. Smaller amounts are tax exempt. 

There are smaller differences at the next thresholds. Singles earning over PLN 20 thousand will pay 445,850% of the tax. $ 501,600 and married couples USD. As you can see, an additional threshold is to be created for those who make profits in excess of $ 1 million. 

However, this is not the only idea of ​​the Joe Biden administration. Speculation about the HFT transaction tax returns (high-frequency trading, which is mainly carried out by vending machines and investment robots). 

Another idea to fund the new president's costly ideas issue of 100-year, low-interest bonds. 

Which of the solutions will be finally chosen? It seems that we are closer to introducing additional tax for the best investors, but we should know the facts in the first half of next week.