Biden Proposes to Raise Long Capital Gains Rate from 20% Up To 39.6%
From 20% Up To 39.6%. At the same time the administration is seeking to eliminate or limit the 1031 option to defer capital gains. President Biden’s “American Families Plan” includes a proposal to impose ordinary personal income tax rates (which the plan proposes to increase to 39.6%) on long-term capital gains of individuals with taxable income of more than $1 million. Coupled with 3.8% net investment income tax, the plan, if enacted, could increase capital gains taxes on both inbound and outbound U.S. investment. If this plan is enacted, you will now pay 39.6% plus the 3.8% Obamacare tax, for a whopping 43.4%. The tax may become retroactive to the announcement date of April 2021.
Overview of Capital Gains Tax Proposal
The tax proposal and plan, in general, seeks to reduce the disparity among taxes imposed on high-, low-, and middle-income taxpayers. Currently, long-term capital gains (derived from assets held one year or more) are subject to tax at 15% or 20% (on taxable income exceeding $40,400 for the 2021 tax year), which is lower than the current highest personal income tax rate of 37%. Under the tax proposal, investors with U.S. taxable income exceeding $1 million would be subject to tax at ordinary income rates on long-term capital gains (but only to the extent taxable income exceeds $1 million).
Biden’s Limitation on 1031 Exchanges
President Biden is not the first administration to attempt to limit 1031 exchanges. President Biden’s proposal would still allow for 1031 exchanges of real property but minimize the benefit to only allow a deferral of $500,000 per year or $1 million if filing a married filing joint return. Assuming Larry in our above example is single, under the Biden proposal, only $500,000 of the gain could be deferred and Larry would have to report $300,000 of capital gain on his tax return.
Please discuss these tax matters with your tax professional.
U.S. Restaurants Scramble to Reimpose Rules
Once again making difficult decisions on health mandates. As the Delta variant of the coronavirus has become the most predominant variant in the United States and medical experts issue confusing advice, restaurateurs find themselves once again making difficult decisions. Where laws allow, many have begun requiring patrons to bring proof of vaccination before dining. The recent rise in infection rates had already prompted some restaurant owners to revise their rules. But the announcement on Tuesday by the Centers for Disease Control and Prevention that even vaccinated people should resume wearing masks indoors added new urgency. In states including California and New York, some restaurant owners are mandating that customers and employees be vaccinated and reinstating older health protocols like requiring that both groups wear masks. But in states like Florida and Arkansas, which have had huge spikes in coronavirus cases, businesses are prohibited from enforcing vaccine requirements, and local governments cannot issue mask mandates.
Why Celeb Chef David Burke Hired His Landscaper
And housekeeper for kitchen gigs. One of the most thankless jobs has been made worse by the labor shortage — and even celebrity chefs are twisting themselves in a knot to hire and retain dishwashers. David Burke, the Food Network star behind 18 restaurants, including the David Burke Tavern in Manhattan, says he has been so desperate for dishwashers and other kitchen staff that he recently asked his personal landscaper and former housekeeper to work in one of his restaurants. After they agreed to don aprons in exchange for beefed up salaries, the Iron Chef America contestant was finally well-staffed enough to open his Rumson, NJ, steakhouse and sushi bar Red Horse Tavern in March. But it’s been anything but smooth sailing. For every person Burke manages to hire, another one quits on him. And the constant churn exacerbates the difficulty of the job for everyone else — creating a vicious cycle of staffing woes.
Chefs Leave Restaurants
To work in private homes. Melissa Sosa had a 6-year-old at home and a salary as a restaurant chef that hadn’t changed within her son’s lifetime. Forget that she was well respected among her peers and worked in prized Miami restaurants with James Beard award honors, including Zak the Baker, Pubbelly, Sugarcane and, lastly, Balloo. She had accepted she would “be broke,” making $15 an hour, working 10- and 12-hour days at a 2-Michelin star restaurant in Brooklyn last year — when the coronavirus forced restaurants to close. That’s when a Miami friend called with an offer: Would she consider coming back to be a personal chef? A private plane flew her from Miami to the Bahamas, where she cooked in an island vacation home for 15 people over seven days around New Year’s Day. As a private chef, she says she commands $60 an hour. “What I made in a week, I would make in a month in a restaurant, sweating my bum off working on a line,” said Sosa, a 12-year restaurant veteran.
New York City Will Require Vaccines
For entry to restaurants and gyms. New York City will become the first major U.S. city to require proof of COVID-19 vaccination at restaurants, gyms and other businesses, Mayor Bill de Blasio said on Tuesday, as the nation grapples with the rapidly spreading Delta variant. With vaccines widely available, political leaders were combating the latest surge in infections with shots and masks rather than ordering businesses to close and Americans to stay home as they did last year. (Graphic of U.S. cases). The U.S. Centers for Disease Control and Prevention on Tuesday issued a new 60-day moratorium on residential evictions in areas with high levels of COVID-19 cases, despite a Supreme Court ruling in June suggesting that such a move would require Congress to pass new legislation. The U.S. government and several states, along with some hospitals and universities, already require employees to get inoculated. Tyson Foods (TSN.N) on Tuesday became one of the largest private employers to require workers to be immunized to combat the virus that has killed over 600,000 in the country.
How Can Restaurants Drive Long Term Resiliency
In the new normal? The COVID-19 pandemic has been an accelerator for growth, change and development across industries and geographies. Restaurants, in particular, were already on the road to innovation as new advances in technology have made order and pick-up options fully automated. And many quick-service restaurants, fast casual chains and casual dining establishments were well on their way to building out robust digital transformation journeys before the impact of COVID-19 disruption — the pandemic just advanced, sped up and amplified change. Customers’ buying habits, as well as restaurant operations, have shifted dramatically because of the pandemic — but restaurants will, once again, go through an industrywide transition. While consumers crave the return to an in-restaurant dining experience, they will also expect a variety of convenient service options. The brands that maintain safety measures and digitally enabled experiences will be favored by customers and garner deeper loyalty. Here are three things restaurant brands should do to accelerate the transition to the new normal in the coming months:
Did You Know?
Cut off from restaurants, Tokyo’s visitors find culinary delights at 24-hour convenience stores. Noodle joints, skewer shops, sushi counters. Those of us who are here covering the Games stare at it all through tinted glass on languid bus rides from one Olympic venue to another. This is for good reason. Japan is in a state of emergency. Coronavirus cases are on the rise. Unleashing thousands of foreigners like me, an American journalist, into a city — to its restaurants and bars and stores — would be imprudent. But we do need to eat. Enter the saving grace of these Olympics, the glue holding the whole thing together: Tokyo’s 24-hour convenience stores, or conbini, as they are known in Japan. They have quickly become a primary source of sustenance — and, more surprisingly, culinary enjoyment — for many visitors navigating one of the strangest Games in history.
Where restaurants see a margin squeeze, workers find financial hope. Raising the federal minimum wage to $15 an hour would lift 1 million Americans out of poverty, according to a study released last year by the Congressional Budget Office, the nonpartisan agency that gauges the financial impact of legislation being considered in Congress. For Gloria Machuca, it’d mean running the air conditioner in her home this summer without worrying about covering her electricity bill. Machuca has been an employee of a McDonald’s restaurant for 21 years, currently earning $11 an hour as a kitchen worker for two stores. She thinks enough of the job to steer her daughter, the eldest of six children, into working for the brand. But she doesn’t understand why an organization of McDonald’s size won’t pay her enough to make ends meet when she’s been a loyal and hardworking employee for more than two decades. Why shouldn’t she be able to take her family for a meal at the very place she sustains with her labor?
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