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Illustration: Annelise Capossela/Axios

President Biden has been clear that he wants to raise taxes on capital gains for high earners. But, until a Wall Street Journal scoop published Thursday night, it wasn't known that he wants those taxes raised retroactively.

Why it matters: It's unscrupulous.

  • This isn't a judgment on the merits or demerits of raising top capital gains rates, either to Biden's preferred 39.6% (plus an ACA surcharge) or closer to the 30% rate than many Democrats prefer. It's a judgment on changing the rules after the game has been played.

Per WSJ: "Biden's expected $6 trillion budget assumes that his proposed capital-gains tax rate increase took effect in late April, meaning that it would already be too late for high-income investors to realize gains at the lower tax rates if Congress agrees, according to two people familiar with the proposal."

The White House argument is likely to be that retroactivity will prevent investors from taking advantage of the period between Biden's original announcement and ultimate bill passage.

  • But this ignores that Biden's announcement was just a starting point for negotiations, and was more press release than bill.
  • And, again, the White House chose not to say at the time that the taxes would be retroactive, leading reasonable investors to make decisions under the assumption that any hikes would take effect either once legislation is signed, or perhaps at the beginning of 2022.

The bottom line: It's laudable that the administration wants its math to work, as part of the most ambitious infrastructure and social spending plan of our lifetimes. But it shouldn't use unfair means to ensure the rich pay their fair share.

Go deeper

May 27, 2021 - Politics & Policy

Republicans' Hail Mary on infrastructure

President Biden meets with Senate Republicans in February. Photo: Saul Loeb/AFP via Getty Images

Some Senate Republicans might agree to add to the national debt to pay for a scaled-back infrastructure plan, senators and aides told Axios — one more grasp at a deal with President Biden before Democrats pack up and go it alone.

Why it matters: Skipping over the thorny question of how to offset up to $1 trillion in new projects could actually be politically and philosophically easier for GOP lawmakers than agreeing on tax increases.

Updated May 27, 2021 - Politics & Policy

Biden concerned by lack of "new funds" in GOP's infrastructure counteroffer

President Biden (L) makes a statement to the press as Sen. Shelley Capito (R-W.Va.) looks on. Photo: T.J. Kirkpatrick/Pool/Getty Images

A group of Senate Republicans on Thursday released the framework for their latest counterproposal to President Biden's infrastructure plan, raising their offer from $568 billion to $928 billion.

The latest: White House press secretary Jen Psaki acknowledged "several constructive additions" to the Republican offer, but said the administration remains "concerned that their plan still provides no substantial new funds for critical job-creating needs."

U.S. Latinos earn less, die earlier in segregated areas

A rally in rally in Brooklyn, N.Y., protesting Latino segregation in October 2015. Photo: Spencer Platt/Getty Images

U.S. Latinos have a higher life expectancy and earn more yearly income when they live in racially mixed neighborhoods compared to areas that are predominantly Black or Latino, an analysis finds.

Why it matters: The study by the University of California Berkeley’s Othering and Belonging Institute released this week shows the physical and economic toll on Latinos as cities become more segregated.