President Joe Biden is calling for an end to valuable tax breaks for private equity fund managers, oil companies, along with investors in crypto and real estate, in his upcoming budget proposal.
The White House plans to target a series of high-profile tax breaks worth tens of billions of dollars for wealthy investors and corporations in the president's budget request to Congress that will be made public Thursday, according to a summary of the proposal. Eliminating these would upend the economics of many real estate and investment-fund deals — forcing Wall Street to reinvent the way that many transactions have been done for decades — if they were to become law.
The Republican-controlled House will block any bill to eliminate the tax preferences, but the administration's documents foreshadow the issues Biden will likely put at the center of his economic platform should he run for a second term in 2024.
"The budget cuts wasteful spending on Big Pharma, Big Oil and other special interests, cracks down on systemic fraud and identity theft, and makes programs more efficient and cost-effective — saving taxpayers hundreds of billions of dollars," according to the summary document.
Many of the provisions to be included in the budget are ideas that Biden has proposed before, but has so far been unable to build the requisite support for in Congress to make them law, including among members of his own party, like West Virginia Senator Joe Manchin.
Biden is proposing eliminating the carried-interest tax break, which allows private equity managers and venture capitalists to pay lower rates on their earnings from the investments they make. This idea was dropped from the Inflation Reduction Act that passed last year, after
The Biden plan also ends a longstanding tax break for real estate investors who can avoid paying capital gains taxes on their profits if they continue to invest the proceeds in other properties.
The administration is also calling to end a break that allows crypto investors to sell their assets at a loss — generating big tax savings — and then immediately repurchase those currencies.
In addition, all special tax preferences for oil and gas companies would be terminated, saving $31 billion.
