New taxes

Biden's budget includes taxing the rich which is a great idea but there is no need nor does it help to raise the income tax rates. Rich people get 70% of their income from investments not earnings so start taxing investments or in simple terms increase the tax on capital gains. The old argument against this was that it amounts to double taxation and if you raise the capital gain rate you will discourage investment. These were valid arguments but the question is what will the rich do with their money if you raise the capital gain rate. They have to put it somewhere and it will not be under the mattress. The government collects $170 billion in capital gains taxes and the current top tax rate is 23.8% as opposed to the top income tax rate of 40.8%. It the capital gain rate was equal to the income tax rate this would bring in an additional $110 billion dollars per year. This would cover about one forth of the new taxes in the Biden budget which claims $400 billion in new taxes.