October 28, 2021 Connor Steens



As 2021 nears its end, traction is gaining around how Joe Biden’s tax proposals look to affect Americans. With reports of the largest ever increase in taxation on investment gain as well as significant alterations to gift and estate tax exemptions and tax rates.

Having stated that the modernization of U.S. infrastructure and investment “should be on the backs of the wealthiest Americans who can afford it, and corporations and businesses who can afford it”, Biden looks to the wealthy to fund his massive investments.

What you need to know:

Capital Gains

•   Capital gains tax rate is thought to be nearly doubled for investors earning more than $USD 1 million per year.

•   Currently, taxation on a long term capital asset that is sold is 20% on the profit. If the asset is a stock, the profit is taxed at 23%.

•   After the proposal is enacted high earners will pay a 39.6% rate on capital gains and a 43.4% rate on profits from financial assets.

Gifts and Estate

•   Currently it is possible to have an estate of up to $11,700,000 without incurring any gift and estate taxes.

•   After the proposal is enacted this limit will be halved to around $6,000,000. Any funds over this will be subject to the increased gift and estate tax rates.

•   The current gift and estate tax rate is 40% of the taxable estate’s value.

•   The proposed gift and estate tax rate is rumoured to be closer to 65%

What you need to do:

•   If you are considering a grantor trust, act now to minimise your taxable estate.

•   If you already have a grantor trust with us, assets must be placed in the trust immediately.

•   A trust formed after the Bill is enacted will be considered part of your taxable estate.

•   Assets placed into a trust after the Bill is enacted will be subject to the increased tax rate


Recent news also announced Biden’s Build Back Better framework for a $1.75 trillion social and climate spending bill – more than half of which will be financed through tax reforms aimed at wealthy Americans, elaborated on further below:

Millionaire and Billionaire Surtax

Aimed at the top 0.02% of Americans this initiative imposes a 5% surtax on adjusted gross income of more than $10 million, with an additional 3% on income more than $25 million. This is expected to raise approximately $230 billion over 10 years and has the potential to affect hundreds of thousands of high income earners.

Essentially, those with an income higher than $25 million will be subject to a 45% federal marginal income tax rate on wages and business income. They will also be subject to a 28% federal rate on long-term capital gains and dividends, along with the existing 3.8% net investment income tax.

IRS Enforcement

Democrats will look to make investments in IRS enforcement, hiring agents trained to pursue wealthy tax evaders, overhaul outdated technology and invest in taxpayer services. Estimated to raise a massive $400 billion over 10 years

Business Income

The proposed framework will impose a 3.8% Medicare surtax on all income from pass-through business, and aim to limit the tax breaks on business losses and tax deductions for the wealthy. Expected to raise $250 billion and $170 billion, respectively, over 10 years.


Substantial financial losses can be avoided if you act now and secure your assets for the future.

Contact us here to get started on establishing a trust or settling further assets on an existing trust.


Connor Steens

Connor Steens works as an Analyst at Southpac Group. Connor has worked closely with Guy on investment an banking relationships. Connor currently oversees and monitors current marketing analytics, exposure and direction, content creation and market presence.
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