While President-elect Joe Biden‘s victory is expected to supply the music industry—as well as all other artistically-inclined ventures—with a multitude of positive changes, artists find that there is one major downside to the new administration: capital gains tax.
When selling songs or music catalog to a company, artists must pay a one-time capital gains tax paid straight to the U.S. government. In the wake of Trump’s presidency, this tax currently comprises 20% of the amount made in the sale. However, with Biden’s intended tax plan, the tax could see an increase up to 37%, depending on tax-bracket and take-home amounts. Further, under the new administration’s tax plan, those making more than $1 million will pay an equal rate on investment income to what they do on wages.
Before Biden takes the White House come January 2021, artists are urgently scrambling to secure multi-million dollar deals as quickly as possible. While the 46th presidency is expected to give much back to creative endeavors, the policy may cause many songwriters to hold on to their song catalogs in order to avoid the tax.
H/T: Rolling Stone
Featured image: Carol Kaster/AP Image
