“The White House is considering raising the capital gains tax rate to 39.6 percent on people earning $1 million and over,” Fox Business reports. For context, the capital gains tax is “a tax on the growth in value of investments incurred when individuals and corporations sell those investments,” according to Investopedia.
The current top capital gains rate is 20 percent, so this hike would amount to roughly a doubling of the tax. And in 13 states, such as New York and California, with their own levies on capital gains, Biden’s proposal would result in some residents facing rates of more than 50 percent.
How does the president justify such a massive increase?
“[The president’s] view is that [paying for the proposals] should be on the backs…of the wealthiest Americans who can afford it,” White House Press Secretary Jen Psaki said. “And corporations and businesses who can afford it.”