What’s in the Democrats’ Tax Plan?

NOTE: This is information is for educational purposes only. These proposed changes are not final, and not intended to be advice.

Corporate Tax Rate Increase

  • The Corporate Rate increased up to 26.5% (graduated rate) for income over $5 Million

Personal Income Tax Increase

  • 37% Marginal Bracket replaced with 39.6% Marginal Bracket
  • Applies to income over $400,000 (Single) or $450,000 (Married Filing Jointly)

Capital Gains Tax Increase

  • Top Rate increased from 20% to 25%
  • Applies to income over $400,000 (Single) or $450,000 (Married Filing Jointly)
  • Effective September 14, 2021 and after

Estate Tax Lifetime Exemption Reduced

  • The Lifetime Gift Tax Exemption reduced to pre-2018 Tax Reform levels (The Tax Cuts & Jobs Act of 2017)
  • Reduced back to $5 Million (indexed from 2018) per individual
  • Effective after December 31, 2021


  • The Wash Sale Rule will apply to cryptocurrency trading
  • Less incentive to sell during a loss for potential tax benefits
  • Potentially, would reduce volatility in the crypto-markets

High Income Tax (Surtax)

  • 3% additional tax on MAGI over $5 Million
  • Applies to income over $5 Million (Single or Married Filing Jointly)
  • Effective after December 31, 2021

Limitations on IRA Contributions

  • No IRA or Roth Contributions allowed for taxpayers with:
    • $10 Million of Assets in IRA, Roth, and/or Defined Contribution Plans; and
    • Income over $400,000 (Single) or $450,000 (Married Filing Jointly)

Additional RMD Requirements

  • Applies to taxpayers subject to RMDs with:
    • $10 Million of Assets in IRA, Roth, and/or Defined Contribution Plans; and
    • Income over $400,000 (Single) or $450,000 (Married Filing Jointly)
  • In addition to regular RMDs, certain taxpayers will be subject to additional withdrawal requirements:
    • 50% of the value over $10 Million
    • If tax-deferred and Roth assets exceed $20 Million, then Roth RMDs must be withdrawn first

No More Roth Conversions

  • Applies to taxpayers with income over $400,000 (Single) or $450,000 (Married Filing Jointly)
  • Effective December 31, 2031

End of Backdoor Roth & Mega Backdoor Roth

  • Applies to all taxpayers
  • Eliminates the ability to convert after-tax balances and/or contributions to a Roth IRA or Roth 401(k)
  • Effective December 31, 2021

NOTE: This is information is for educational purposes only. These proposed changes are not final, and not intended to be advice.

IMPORTANT DISCLOSURES: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bogart Wealth, LLC (“Bogart Wealth”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Bogart Wealth. Please remember to contact Bogart Wealth, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Bogart Wealth is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Bogart Wealth’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request. This material was prepared by Broadridge Investor Communication Solutions, Inc.

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