Biden's Budget Proposal: Capital Gains Tax Increase to 44.6%
Higher Taxes for High-Income Earners
President Biden's proposed FY2025 budget includes a substantial increase in the top capital gains tax rate to 44.6%. This proposed rate would apply to investors with incomes of $1 million or more, and would effectively double the current rate of 23.8%.
State Taxes Could Add to Burden
The proposed federal capital gains tax increase would be further compounded by state income taxes. Many states already impose their own capital gains taxes, which range from 2.9% to 13.3%. As a result, the total capital gains tax rate for high-income earners could reach 57.9% in some states.
Conclusion
The proposed 44.6% capital gains tax rate would significantly increase the tax burden on high-income investors. Coupled with state income taxes, the total rate could reach a staggering 57.9% in some states. This steep tax hike would have a profound impact on the investment decisions and wealth accumulation of individuals and families.
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