The White House won’t rule out a retroactive implementation of its sweeping new tax plan — and tax haters across Wall Street are in a panic. The Biden administration has previously said levying taxes retroactively — which could stick taxpayers with jacked-up rates on transactions dating back to Jan. 1 instead of imposing them beginning next year — isn’t its “first choice” as it pushes a bold series of hikes on companies and the rich. Nevertheless, it has refused to rule out the rare but not unprecedented move. In January, Mark Mazur, Treasury Department deputy assistant secretary for tax policy, said retroactive taxes could make sense if they were introduced early enough in the year. It would be hard, if not impossible, for any individual or business to make any financial decision without knowing future tax ramifications.
“This is the No. 1 question I get from investors,” says James Lucier, managing director at Capital Alpha, a Washington-based policy research outfit. “Every meeting someone asks me about retroactive taxes. It is the hot-button concern.” President Biden has floated a slew of taxes targeted at the financial industry and high earners, including raising the capital-gains tax — taxes paid on the value of investments — to as high as 43.4 percent from 23.8 percent on households making more than $1 million a year. He has likewise proposed hiking the corporate tax rate to 28 percent from 21 percent.