President Biden recently released his 2024 budget proposal that would increase taxes by over $47 trillion to pay for expanded social programs and higher interest costs. His plan would raise the top federal income tax rate from 37% to 39.6% for those earning over $400,000, and would tax capital gains at the same rate as ordinary (regular) income for those making more than $1,000,000. This would effectively double the current 20% maximum capital gains tax rate, which could dramatically increase the taxes due on the sale of your practice and/or office building.

Biden’s proposal would also extend the 3.8% Obamacare surtax currently due on investment income for those making over $250,000 to include business income, including profits from your practice’s Sub S, your real estate LLCs, and other businesses. It would also raise this rate, and the top Medicare payroll tax on wages, to 5% for those earning more than $400,000—effectively raising the top federal tax rate to 44.6%! Add in state taxes, and many doctors could pay a top rate of more than 55%!

New Wealth Taxes

For the first time ever, Biden’s proposed budget includes a new tax on “wealth” (values of assets rather than income). It proposes a 25% annual tax