Congressional Democrats and President Biden are pushing a reckless, multi-trillion-dollar tax-and-spend plan that will raise taxes on working families and small businesses and create vast new welfare programs that will exacerbate inflation.
One of the tax hikes that may be included in this legislation is a proposal to tax Americans who invest in exchange-traded funds (ETFs).
This proposal, which has been introduced by Senate Finance Committee Chairman Ron Wyden (D-OR), will raise the cost of investing for millions of American families, including those making less than $400,000.
According to the Securities Industry and Financial Markets Association (SIFMA), in 2019 there were $4.4 trillion in U.S. ETF assets. Approximately, “9.6 million households, or around 8% of total U.S. households, own ETFs.” In fact, the median income for households owning ETFs is $125,000.
This tax will breakPresident Biden’s pledge to not raise taxes on any American earning less than $400,000.
The bill would increase taxes on investors of ETFs by repealing a provision in statute that allows regulated investment companies (e.g., mutual fund, ETF, real estate investment trust) to distribute shares in-kind without immediately paying capital gains tax. This would especially harm the use of ETFs because