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Why Americans for Prosperity supports the Middle Class Savings Act

Aug 20, 2021 by AFP

The federal government is currently exploring increasing taxes on capital gains that would squash the ability of Americans to save and invest.

  • President Biden has proposed increasing the top capital gains tax rate from 23.8 percent to 43.4 percent when including the 3.8 percent net investment income tax.
  • When factoring in state and local capital gains taxes, estimates show that rate would average upwards of 48 percent.
  • Experts project that raising the top statutory capital gains tax rate may actually decrease revenue by $33 billion.

Conversely, the Middle Class Savings Act, as introduced by Congressman Andy Barr, aligns capital gains tax rates with the income tax brackets established under the Tax Cuts and Jobs Act of 2017.

Americans for Prosperity supports the Middle Class Savings Act because:
  • By effectively reducing capital gains tax rates, the bill would allow Americans to save and invest more, which benefits businesses and overall economic growth.
  • Additionally, by reducing the capital gains tax rate the bill would help offset additional burdens that result from inflation, since nominal gains are subject to the capital gains tax, as well as double taxation.

While President Biden and Senator Bernie Sanders want to increase your taxes to pay for their $3.5 trillion spending spree, The Middle Class Savings Act builds off the success of the TCJA to help keep more money in American’s pockets.

As the economy continues to recover from the COVID-19 pandemic, it is important for lawmakers to promote pro-growth tax reforms that allow Americans to save and invest more, not less. The Middle Class Savings Act does just that.

Learn more about how President Biden’s proposal to raise the capital gains tax would harm your ability to save and invest.