President Joe Biden wants to raise the nation's capital gains tax to higher than it was back in the 1970s when Jimmy Carter was president and return policies that Democrats rejected years ago, Americans for Tax Reform President Grover Norquist said Tuesday.
"He wants to raise capital gains to higher than where it was when Jimmy Carter had it and where the Democratic House and Senate forced him to bring it down," Norquist said on Fox Business' "Mornings With Maria." "We know we have a policy even more than the modern Democratic Party thought too extreme in the late 70s."
Biden is reportedly considering almost doubling the capital gains tax rate for wealthy individuals to 39.6%. When coupled with an existing surtax on investment income, federal tax rates for investors could climb to 43.4%. The plan boosts the capital gains rate to 39.6% for those earning $1 million or more, up from the current rate of 20%.
Biden's plans also include ending the "step-up in basis" tax break program for people inheriting farms or small businesses, and Norquist said that will be devastating for people continuing their families' ventures, said Norquist.
Eliminating the break will raise $113 billion over 10 years when combined with the capital gains tax hike, reports CNBC, quoting the University of Pennsylvania’s Wharton School.
Under current law, investors can avoid taxes on unrealized capital gains, or appreciation in assets that are unsold, by holding the assets or stock until they die. At that point, their heirs get the asset valued at its current market value, rather than being valued at its original price, which eliminates the gain on paper and frees estates from paying tax on the property's unrealized gain, according to CNBC.
However, the heirs must pay capital gains on the property, Norquist insisted, which "devastates the transition of small businesses, farms, and homes within families."
Norquist said Democrats initially passed the law in 1976 but it was "so outrageous" that Democrats down the line in 1980 repealed it.
But now Biden is working to put forward "ideas rejected by the Democratic Party because of damage to the economy. He is doubling down on them."
Meanwhile, Biden is following the policy of former President Barack Obama on the capital gains tax.
"He (Obama) said he didn't care" about harm to businesses, because "it was about, you know, hurting people to work too hard,' said Norquist. "Odd as that sounds, envy is a very powerful emotion. It doesn't go away when somebody becomes a politician."
And now the same thing is being seen with Biden's administration "going to back to bad ideas," said Norquist.
There is also the problem of wage and price controls from overseas, said Norquist.
"We have trouble coming up with new drugs," said Norquist. "The Europeans and others put price controls on them and steal value (from) what American companies create in pharmaceuticals."
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