Goldman Sachs Weigh In On Biden Tax Chatter

Goldman Sachs note that "media reports suggest the Biden Administration will propose to tax capital gains at the top ordinary income tax rate (39.6%, or 43.4% when the existing 3.8% tax on net investment income tax is added). We expect Congress will settle on a more modest increase, potentially around 28%. It is unclear when the tax rate increase would be effective, but we think it is unlikely to apply to gains realized before May, and an increase effective Jan. 1, 2022 is more likely."

• "The issue will likely remain in flux over the next several months. We expect President Biden to discuss the issue among many other topics when he addresses a joint session of Congress on April 28. By early May, the Biden Administration might also release its full fiscal year 2022 budget submission to Congress, which would provide more details on tax proposals including capital gains. However, the timing of this release remains unclear. In the interim, comments from centrist Senate Democrats, such as Sens. Joe Manchin (D-W Va.) and Kyrsten Sinema (D-Ariz.), could clarify where key swing voters might come out on the issue."