Emmanuel Martinez Apr 29, 2021

Biden's New Capital Gains Tax Proposal

On Thursday last week, Bloomberg and The New York Times reported that the president will include a proposal to increase the capital gains tax for people earning $1 million or more in his American Families Plan, which is expected to be released in the coming days.

Although details haven't been released yet, the president has previously stated that he wants anyone making more than $1 million per year to pay a 39.6% tax on long-term capital gains. That's nearly twice as much as the current rate.

The current Capital Tax Rates are:


Long-term capital gains tax rate                        

Your income


$0 to $40,000


$40,001 to $441,450


$441,451 or more

This is something that Wall-Street and many Conservatives and Moderate Democrats fear.


The low Capital Gains Tax Rates are incentives for investing, especially long-term investing. If you raise these rates it discourages investing and might drive capital and money away from the US. Therefore giving companies less available funds to raise which could in turn lead to lower economic progress and less jobs in the long-run. 

There is also some evidence and projections that say that this tax-hike can actually reduce tax-revenue.