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Biden’s Capital Gains Tax Crusade – OpEd


By Andrew Moran*

President Joe Biden is ostensibly keeping up with one of his 2020 presidential campaign promises. According to various reports, the administration is proposing doubling the capital gains tax rate for wealthy individuals to 39.6%. When an existing surtax on investment income is added to the mix, affluent investors earning more than $1 million could be penalized as high as 43.4%. But, depending on the state, some $1 million earners might see higher capital gains levies. In New York, for example, the combined federal and state capital gains rate would exceed 52%. In California, the rate could be nearly 57%.

Capital gains taxes are paid when assets are sold and applied to their appreciation.

Joe Biden To Confiscate More Wealth?

The purpose of the tax hike is to cover some of the president’s ambitious spending plans, including health care and childcare. Official details are expected to be released at the end of the month when President Biden unveils his American Families Plan, the second part of his multi-trillion-dollar infrastructure package. Democrats say that the rich need to pay their fair share, while Republicans contend that the current structure promotes savings and economic growth.

Financial markets were clearly irked by the news, with the Dow Jones Industrial Average plunging more than 300 points but then recuperating most of its losses to close out the trading week. What happened? Market analysts think that President Biden will settle on a top capital gains tax rate of 26% to 30%.

By now, it is clear that the White House is relying on the rich to cover these big government initiatives. The seven-year American Jobs Act relies on a corporate tax hike to pay the bill in 15 years. Any economist will agree that corporations could easily shop around the globe for better tax havens, which explains why Treasury Secretary Janet Yellen wants a global minimum confiscatory rate on corporations.

It looks like former Federal Reserve Chair Alan Greenspan’s vision in the 1990s is not coming to fruition. He told the Senate Budget Committee in hearings at the time: “The appropriate capital gains tax rate is zero.” Biden had initially said during a primary debate that he wanted to abolish the tax before correcting himself and revealing that it should be doubled.


Everything is getting more expensive, and all at the same time. While all the focus is on the consumer price index (CPI), the producer price index (PPI) should be the cause of concern. Producer prices have risen for seven consecutive months, topping a decade high of 4% in March. Why is the PPI increasing? The cost of raw materials, including lumber, keeps going up.

Spot lumber prices have rallied more than 250% over the last 12 months, soaring to a record high of about $1,200 per thousand board feet on Apr. 20. In addition to the tremendous monetary expansion by central banks worldwide, lumber has been impacted by several factors, including severe weather conditions, strengthening global demand, and falling supplies from pine beetles in British Columbia.

These conditions are adding as much as $24,000 to the cost of the typical single-family home in the U.S., according to the National Association of Homebuilders. Timber stocks, like Canfor and West Fraser Timber, have enjoyed double-digit growth since the fall.

Forestry experts are warning that lumber prices are likely to remain elevated throughout 2021. Chris Black, co-owner of Century Mill Lumber in Stouffville, ON, told CTV News that consumers should not believe the market will return to normal. “A lot of consumers think I’m going to push it off until next year (a project involving wood) but there is a strong part of me that wants consumers to know that it’s never going back to what it was unfortunately,” he said.

How long will it take for the supply and demand imbalance in the international commodities to rebalance?

Raising Rates In Mother Russia

Is the Bank of Russia one of the few competent central banks in the world? Is there any chance of substituting Federal Reserve Chair Jerome Powell or European Central Bank (ECB) chief Christine Lagarde with Governor Elvira Nabiullina? Is President Vladimir Putin laughing at the rest of the world? Moscow surprised economists and raised its benchmark interest rate by 50 basis points to 5%, triggering a substantial rally in the ruble against a myriad of currencies. A Bloomberg survey showed that economists either anticipated a small rate cut or nothing at all.

Like Charles Bronson in Death Wish, all indicators point to one thing: This ain’t over. Nabiullina suggested that more policy tightening is in the cards. “There’s a real risk of delaying the return to neutral monetary policy,” she told a news briefing. “These risks may make it necessary for a more serious, significant increase in the rate in the future.”

But why another rate hike? Inflation. The central bank increased its year-end forecast for price growth, prognosticating a rate as much as 5.2%. The country has faced multiple blows to its economy, from geopolitical disputes with the U.S. to the global commodities supercycle. Whatever happens, as the rest of the world continues to be dovish, Russia is hawkish.

*About the author: Economics Correspondent at Andrew has written extensively on economics, business, and political subjects for the last decade. He also writes about economics at Economic Collapse News and commodities at He is the author of “The War on Cash.” You can learn more at

Source: This article was published by Liberty Nation

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