Biden Administration's New Tax Proposal Puts American's Investments and Economic Opportunities At-Risk.
Background:
The Biden Administration has proposed to limit or eliminate like-kind tax-deferred exchanges of investment or business property, commonly referred to as “1031 Exchanges.”
Why 1031 Tax Exchanges are Important to the Central Valley.
“1031 Exchanges” allow folks buying and investing in real estate, including farmers and retirees looking for extra income, to “trade up” properties they own by selling and reinvesting the money made from the sale into a new property.
In exchange for stimulating the economy, the federal government grants a tax deferral for the gains from these initial sales.
As a result, these folks can more readily expand their portfolio, which creates a number of economic benefits.
Farmers are able to reinvest those dollars by hiring more workers, planting more crops, and helping our Valley feed the nation and world.
Retired folks and mom-and-pop landlords can use the benefits to buy new rental properties and help grow their nest egg, while keeping rents low.
In addition to benefits like these, studies have shown that these real estate transactions stimulate the job market, providing over 550,000 jobs throughout the US.
With so many positive economic impacts, from the nationwide economy to everyday benefits like lower food and rental prices, it is clear that a proposal to eliminate or limit the 1031 Exchange program would be a detriment to the economic future of countless families.
Please join us in opposing this harmful proposal and telling our representatives in Congress to vote with a resounding “NO” on any bill that may come before them.
Links & Resources:
Summary: This WSJ article predicts the disastrous consequences to President Biden’s new tax plan. Specifically, the taxes on capital gains. Biden’s tax proposal on capital gains will hurt the economy and entrepreneurs by taxing them at substantially high rates. The new proposal will affect investors and how many staff companies can hire, leading to job loss.
“The wealthy can weather this economic stultification; the harshest impact will be on the poor and disenfranchised, the people the Biden administration purports to want to help.”
The Inflation on Capital Tax By Aharon Friedman and Stephen Miran
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