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Today, we’re talking about financial planning in the Biden administration. What are some of the proposals that are out there? What are some of the changes that might be coming down?

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Show Notes For This Episode

On this episode of Saving the American Dream, we’re talking about financial planning during President Biden’s administration and how you should adjust your plan to meet potential changes that are coming with the new administration.

“There are definitely some people that are worried about how this could affect their businesses and their portfolios. And then most people, I would say, are curious,” said Michael. “It’s a hot topic.”

The stimulus payments have been a big topic. There have definitely been some effects that have impacted supply chains. A lot of businesses we work with are having issues with their supply chains. If demand exceeds supply, that means prices go up. And if people are getting paid to stay at home, they tend to stay at home and we need a lot of people at work to create more supplies, to meet the growing demand from the economy opening back up.

Another hot topic is the proposed capital gains tax increases, which could potentially have a tremendous impact.

Right now, the top capital gains tax rate is 20%. And then you have the additional 3.8% of the Medicare tax that’s on top of that, so 23.8%. The increase that they’re proposing would take it from 20% to 39.6%, along with that 3.8% Medicare tax.

So you’re looking at about 43% at the top federal capital gains tax rate. And it’s being proposed on incomes over $1 million. So, if you’re in a state that has a state income tax, in addition to that, there’s the potential that the government’s going to take over 50% of your capital gain.

If you’re in California and you’re potentially paying another 13%, in addition to that 43%, you would potentially be looking at paying a 56% capital gains tax, which is almost unfathomable to think about.

Listen to the full podcast or use the timestamps below to jump to a specific section.

Navigating the Show

[2:23] – Stimulus

[5:09] – Infrastructure plan

[9:57] – Capital gains tax increases

[15:34] – Climate plan

 

“A lot of businesses we work with are having issues with their supply chains. If demand exceeds supply, that means prices go up.

– Michael Schulte