Last month, we covered Biden's Proposal on the Capital Gain Tax Increase from 20% to 39.6%. Now this is just the Federal rate. If you also apply the State rate, the capital gain tax rate may even go high as 56.7% in states like California. But the latest news report shows that Biden is planning to retroactively apply the new rate increase back to April 2021. As soon as the Capital Gain Tax Increase becomes a law, all sale of assets subject to capital gains will now be impacted with the higher rate. 

One of the BIG reason "WHY" is that Biden wants to close the gap of investors selling-off their assets to avoid the new increased rate. In 1986, when the capital gain rate jumped from 20-27%, the amount of investors selling-off their assets increased by 60%! Likewise, in 2012, when the capital gains rate increase from 15% to 20%.

To avoid the bill sell-off by investors, Biden wants to create a measure to prevent the investors from doing so. And that solution is to retroactively apply the Capital Gains Tax Increase so that investors can't avoid the increase...

On top of that, Biden plans on spending $80 Billion into the IRS budget to increase Audit activities and enforce the tax code to capture loss tax revenue and make sure that the capital gains taxes are being paid. As new taxes are enacted or increased, the tax payers will seek new ways of avoiding the taxes as much as possible. The plan is to prevent much of the fraudulent avoidance as possible.

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