Although President Joe Biden’s proposed changes to tax law could cause members of his cabinet to pay more capital-gains taxes, they could delay paying these taxes thanks to a lesser-known federal provision, The Wall Street Journal reports.
Ethics policies for top government officials frequently force cabinet members to convert assets that could cause a conflict of interest into low-risk assets, such as treasuries or mutual funds, and are given certificates of divestiture that they can use to avoid paying capital-gains taxes at that time.
Biden’s plan would greatly increase capital-gains taxes, from 23.8% to 43.4% if passed, which has prompted many of his cabinet officials to start selling assets in order to avoid paying the higher rate, but if those assets increase in value that would cause their taxes to increase.
Secretary of State Antony Blinken has already sold hundreds of shares of Oracle, Berkshire Hathaway, Apple, Facebook, and 3,700 shares of Ally Financial Inc., as well as the one-third of the consulting firm WestExec Advisers LLC that he owned. Defense Secretary Lloyd Austin sold tens of thousands of shares of Tenet Healthcare Corp., whose board he sits on, for anywhere from $1 million to $5 million.
The Journal notes that Energy Secretary Jennifer Granholm was granted