Copying Trudeau?
Cardone’s mention of Trudeau relates to recent developments in Canada, particularly Prime Minister Justin Trudeau’s 2024 federal budget proposal, which raises the capital gains inclusion rate from 50% to 66.67% for certain high earners.
Currently, only 50% of capital gains are subject to tax in Canada. However, effective June 25, Canadians earning over $250,000 in capital gains in a year will see 66.67% of that gain subject to taxation. Accounting firm Grant Thornton estimates that individuals in the top marginal tax bracket could experience an approximately 8% to 9% rise in capital gains taxes due to this change.
Biden’s plan is a bit different — but it’s also targeting high-income investors.
The figure Cardone tweeted is found in a footnote of a document called “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals.”
Biden’s main proposal is to have long-term capital gains and qualified dividends of individuals with taxable income of over $1 million “be taxed at ordinary rates, with 37 percent generally being the highest rate (40.8 percent including the net investment income tax).”
The footnotes detail how this rate could be increased even further.
“A separate proposal would first raise the top ordinary rate to 39.6 percent (43.4 percent including the net investment income tax). An additional proposal would increase the net investment income tax rate by 1.2 percentage points above $400,000, bringing the marginal net investment income tax rate to 5 percent for investment income above the $400,000 threshold. Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent,” it explains.
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Learn MoreCarter vs Reagan again?
Cardone’s reference to “the last guy who tried it” is also quite intriguing.
The last time the capital gains tax approached such a high level in the U.S. was in the late 1970s during President Carter's administration. However, while President Carter subsequently lost the 1980 presidential election, the outcome was likely influenced by multiple factors.
The election occurred during a time of economic challenges, including high inflation and unemployment rates, as well as the Iran hostage crisis. President Reagan's campaign focused on themes of economic revitalization, reduced government regulation, and a more assertive foreign policy, resonating with many voters.
Right now, the election between President Biden and former President Donald Trump still appears to be a tossup. In a recent Marist National poll, respondents were asked to choose between Trump and Biden if the election were held today. The results showed that 48% of voters favored Trump, 51% chose Biden, and 1% remained undecided.
However, a recent Emerson College poll found that 46% of voters supported Trump, 43% supported Biden, and 12% were undecided.
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