11:21 GMT12 May 2021
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    Stocks tumbled last week, following the emergence of a report suggesting US President Joe Biden would set forth a new capital gains hike targeting wealthier US taxpayers. Republicans, and even some Democrats, have argued that such a move is too radical, and could have negative ramifications on the US economy.

    Brian Deese, director of the National Economic Council, spoke out in support of Biden's capital gains tax proposal during a Monday briefing in the Brady Briefing Room of the White House. 

    "The reforms that the president will lay out are focused on this top sliver of people and treating capital gains as the same as wages for that top three-tenths of a percent," argued Deese, Biden's top economic adviser. 

    He repeatedly highlighted the proposed capital gains tax hike will only impact 0.3% of Americans. 

    "For the other 997 out of 1,000 households in the country ... this is not a change that will be relevant," he said, noting this is "not the top 1%, it’s not even the top one-half of 1%." 

    Deese also told reporters the revenue obtained from the tax hike could be put toward programs and initiatives that have been linked to increased economic success. 

    "Investments, for example, in early childhood and in our children return enormous dividends in terms of their own academic success, reduced cost in the health-care system, productivity and growth in the future," he added. 
    U.S. National Economic Council Director Brian Deese addresses reporters at the top of the daily press briefing at the White House in Washington, U.S., April 26, 2021
    © REUTERS / Evelyn Hockstein
    U.S. National Economic Council Director Brian Deese addresses reporters at the top of the daily press briefing at the White House in Washington, U.S., April 26, 2021

    Nevertheless, many lawmakers and economists have cast doubt on the proposal. 

    "I don't see why the thirst for raising taxes is so incredibly large when we see what ... impact that's going to have on our economy, on our job creation and all that," Sen. Shelley Capito (R-WV) told MSNBC's "Squawk Box" on Friday, following reports of the capital gains tax hike amounting to 43.4%.  

    It's worth noting the estimated 43.4% is after the addition of investment income tax. As it currently stands, the top capital gains rate is 23.8%, including investment income tax. 

    "Why don't we move forward and try to live within our means and provide sustainability, in terms of our workforce, and predictability in terms of the tax structure?" she remarked. 

    Capito also acknowledged that the technology utilized by the Internal Revenue System (IRS) is outdated and in dire need of modernization, so that Americans can ensure everyone is indeed paying their "fair share." 

    Back in January, US Treasury Secretary Janet Yellen argued in written testimony to the Senate Finance Committee that the US tax system "cannot be tilted toward corporate interests and the wealthy, while those that are sustained predominantly by wages bear an unequal burden."  

    "Biden will require corporations and the wealthiest Americans to pay their fair share," she pledged during her confirmation hearing. 


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    taxpayers, US economy, stock market, Joe Biden, Internal Revenue Service (IRS), economy, Biden Administration
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