A top White House economic advisor on Monday defended President Biden’s plan to raise the capital gains tax — saying the plan will only hit the wallets of a tiny number households across the country.
Speaking at the White House press briefing, Brian Deese, the director of the National Economic Council, said the tax hike will only affect households that make more than $1 million in a year, or 0.3% of Americans.
The tax increase, Deese added, is designed to hit households that profit mostly off of investments, rather than wages.
“For people making less than $1 million a year, about 70% of their income comes from wages. But for those making more than $1 million, for the top 0.3%, it’s the opposite. About 30% of their [income] comes from wages,” he said.
The vast majority of Americans will not see a tax hike if the plan goes through, Deese claimed.
“For the other 997 out of 1,000 households in the country … this is not a change that will be relevant. It won’t change the tax treatment of capital gains at all,” he said.
Deese did not go into specifics about the plan, but Biden is expected to unveil the proposal Wednesday as a way to fund his “American Families Plan” legislation, CNBC reported.
Bloomberg News previously reported the tax hike would, in some cases, increase the capital gains tax by nearly double — raising it from 20 percent to 39.6 percent on income over $1 million.
The American Families Plan may include initiatives such as making community college free across the country and expanding government aid to child care, according to CNBC.
Deese also defended the plan from criticism that it may harm the rate of investment in US businesses.
“Across a wide body of academic and empirical evidence, there is no evidence of a significant impact of capital gains rates on the level of long-term investment in the economy,” he said at the briefing.