E30: Ramifications of Biden's proposed capital gains tax hike, federal budget, India's COVID surge, founder psychology & more

Evidence shows the specific April 2021 Biden proposal to raise the top federal long‑term capital gains tax rate itself to 39.6% was never enacted.

• In April 2021, the Biden administration proposed nearly doubling the top long‑term capital gains rate for high‑income taxpayers from 20% to 39.6%, as part of the American Families Plan.
• Subsequent major tax legislation under Biden—most notably the Inflation Reduction Act of 2022—did not raise the statutory long‑term capital gains rate to 39.6%. Instead, changes focused on corporate minimum taxes, stock buyback excise tax, and IRS enforcement, leaving the top federal long‑term capital gains rate at 20% plus the 3.8% Net Investment Income Tax for high earners. (Various tax references and IRS guidance through 2023–2025 confirm the top LTCG bracket remains 0% / 15% / 20%, not 39.6%.)
• No later budget or reconciliation package that actually passed Congress adopted a 39.6% capital‑gains bracket; the 39.6% figure remains the top ordinary income rate in some Biden proposals, but capital gains themselves were not converted to that rate in enacted law.

Since Chamath’s prediction was that “It’s not going to pass”—referring specifically to the 39.6% capital‑gains hike—and that precise provision indeed did not become law, the prediction is right.

Biden’s April 2021 proposal called for raising the top long‑term capital‑gains rate for high earners from 20% to 39.6% (plus the 3.8% NIIT) as part of his American Families Plan / broader economic agenda. That increase was envisioned to move through a second, more "human infrastructure"‑focused bill (often discussed alongside or after the American Jobs Plan / physical infrastructure bill).

What actually happened:

1. No long‑term capital‑gains rate hike for individuals was enacted. The Inflation Reduction Act of 2022 (the major tax-and-spending bill that did pass via budget reconciliation) focused on: a 15% corporate minimum tax, a 1% stock‑buyback excise tax, enhanced IRS enforcement, and clean‑energy and health‑care provisions. It did not raise the statutory long‑term capital‑gains rate for high‑income individuals; the top federal LTCG rate remains 20% (plus the 3.8% NIIT) for high earners.
2. The broader “human infrastructure” / Build Back Better vision never passed in the form that contained a large individual capital‑gains hike. A more expansive Build Back Better bill—where such individual tax hikes were negotiated—stalled in the Senate and was never enacted. Its eventual successor, the Inflation Reduction Act, omitted the long‑term capital‑gains rate increase.

Because (a) the second “human infrastructure” bill in the sense anticipated did not pass with those provisions, and (b) the federal top long‑term capital‑gains rate for high earners was not raised substantially above 20%, Sacks’s combined prediction—that the tax hike would be included in that second bill, that bill would pass, and that the LTCG rate would be substantially increased—is wrong.

Biden’s April 2021 American Families Plan explicitly proposed taxing long‑term capital gains and dividends for households with more than $1 million of income at the ordinary top rate of 39.6%, nearly doubling the then‑top 20% capital‑gains rate (43.4% including the 3.8% NIIT).(bidenwhitehouse.archives.gov) However, that plan was never enacted as introduced; major components of the American Families Plan ended up in the failed Build Back Better negotiations, and key planks (like its flagship family and leave provisions) "have not become law."(washingtonpost.com)

As of tax years 2025 and 2026, federal long‑term capital gains are still taxed at preferential rates of 0%, 15%, or 20%, with only the income thresholds indexed for inflation; no 39.6% long‑term capital‑gains bracket exists in current law.(kiplinger.com) In other words, the specific Biden proposal to tax long‑term capital gains for million‑plus earners at 39.6% (roughly doubling the top rate) was never enacted.

Given that the prediction was about that specific near‑doubling of the top long‑term capital‑gains rate not becoming law, and more than four years have now passed with the old 0/15/20 structure still in place, Chamath’s prediction matches the outcome.

As of November 30, 2025, no version of President Biden’s April 2021 proposal to significantly raise the federal long‑term capital‑gains tax rate for high earners (toward or into the high‑30%s) has been enacted by Congress.

Key facts:

1. Original proposal (April 2021): The American Families Plan proposed raising the top long‑term capital‑gains rate for households with over $1 million in income to 39.6%, effectively treating capital gains like ordinary income at the top bracket.

2. What actually passed in Congress:

   • The Inflation Reduction Act of 2022 did not change the statutory long‑term capital‑gains tax brackets; instead, it focused on a 15% corporate minimum tax, IRS enforcement, and other measures. It left the individual long‑term capital‑gains rate structure (0% / 15% / 20% plus NIIT) unchanged for high earners.
   • Earlier versions of the Build Back Better negotiations in 2021–2022 discussed various capital‑gains changes, but those provisions were either dropped or never enacted. The final enacted legislation did not materially raise the top long‑term capital‑gains rate for individuals above the pre‑Biden law 20% statutory maximum (excluding the separate 3.8% Net Investment Income Tax).

3. Current law (late 2025): The top federal long‑term capital‑gains rate for individuals remains 20%, plus the separate 3.8% Net Investment Income Tax for high‑income taxpayers, just as before Biden’s April 2021 proposal. There has been no new statute that:

   • Raises the long‑term capital‑gains rate well above 20% for high earners, or
   • Enacts an alternative but clearly analogous version of the April 2021 39.6% concept.

4. Time horizon: Sufficient time has passed (over four years since the April 2021 proposal and more than three years since Democrats’ main legislative pushes in 2021–2022) to determine whether "something like it" passed. The relevant tax packages for this presidency’s early term have already been enacted without such a change.

Because no version of the proposed substantial capital‑gains rate hike was enacted, Friedberg’s prediction that “it’s going to pass” / “something like it’s going to pass” is wrong.

Derek Chauvin’s team did in fact invoke Rep. Maxine Waters’ comments in challenging the verdict. In the trial court, Chauvin moved for a mistrial on April 19, 2021, explicitly citing Waters’ remarks that protesters should “stay on the street” and “get more confrontational” if he were acquitted; Judge Cahill denied the motion. (law.justia.com) On direct appeal, Chauvin argued that pervasive publicity and prejudicial statements by elected officials (including Waters) required a change of venue, a continuance, sequestration, or a new trial, but the Minnesota Court of Appeals held that the district court had taken sufficient steps to mitigate publicity, verified that jurors could be fair and impartial, and therefore had not abused its discretion—i.e., no actual or presumed prejudice was shown. (law.justia.com) The court affirmed his conviction, and both the Minnesota Supreme Court and the U.S. Supreme Court declined to disturb that result. (en.wikipedia.org) There has been no appellate finding that Waters’ comments contaminated the jury or warranted reversal, and the conviction has been upheld against all such publicity-based challenges. (ny1.com) This matches Sacks’ prediction that the defense could try to use Waters’ remarks on appeal, but that absent proof of actual jury contamination, the conviction would be upheld on that issue.

Evidence from multiple independent valuation rankings shows that Stripe has never become the world’s most valuable private company with only SpaceX ahead of it.

• Around the time of the prediction, Stripe’s March 2021 round valued it at about $95B, while even then ByteDance was significantly larger (about $180B), and articles explicitly noted that Stripe’s valuation was below ByteDance’s internationally. (sofi.com)
• The Hurun Global Unicorn Index 2021 ranked the top private companies as: 1) ByteDance $350B, 2) Ant Group $150B, 3) SpaceX $100B, 4) Stripe $95B—placing Stripe only fourth, behind both ByteDance and Ant as well as SpaceX. (inventiva.co.in)
• In 2024, Hurun again shows Stripe well behind multiple firms: 1) ByteDance $220B, 2) SpaceX $180B, 3) OpenAI $100B, 4) Ant $80B, 5) Shein $65B, 6) Stripe $61B. Stripe is sixth, not second. (mp.hurun.co.uk)
• A 2025 CB Insights–based ranking (via Visual Capitalist) similarly lists: 1) SpaceX $350B, 2) ByteDance $300B, 3) OpenAI $300B, 4) Stripe $70B, with Stripe only fourth in the world. (visualcapitalist.com)
• Recent transaction-based valuations reinforce this gap: ByteDance is being valued in 2025 secondary deals and buybacks at roughly $330–480B, while Stripe’s latest reported valuation is only about $106.7B—far below ByteDance and also below OpenAI’s roughly $300B valuation in recent deal discussions. (reuters.com)

Across 2021–2025, every major dataset and news source shows at least ByteDance—and often Ant Group and/or OpenAI—valued above Stripe. There is no point at which Stripe is the most valuable private company in the world with the sole exception of SpaceX, so the prediction did not come true.