This segment of What’s Ahead goes over the reasons that doubling the capital gains tax—as proposed by the Biden administration—would hurt everyone, not just the rich.
The economy stagnates without new investment. Investing is risky. Most new businesses fail within a few years of inception. If government severely taxes the rare successes, guess what? Investments in new businesses won’t be made or will shrink in number.
Doubling the capital gains levy will reduce government revenue. People won’t realize gains on their assets.
Biden’s ultra-high tax will drive risk capital to Europe and Asia, where average rates would be less than half of ours.
And, of course, that kind of rate would depress stock prices, thereby hitting the value of retirement funds.