Joe Biden is eyeing a capital gains tax as high as 43.4% for wealthy

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President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6 per cent, which, coupled with an existing surtax on investment income, means that federal tax rates for investors could be as high as 43.4 per cent, according to people familiar with the proposal.

The plan would boost the capital gains rate to 39.6 per cent for those earning US$1 million or more, an increase from the current base rate of 20 per cent, the people said on the condition of anonymity because the plan is not yet public. A 3.8 per cent tax on investment income that funds Obamacare would be kept in place, pushing the tax rate on returns on financial assets higher than the top rate on wage and salary income, they said.

Stocks slid on news about the plan, with the S&P 500 Index down as much as 0.6 per cent after climbing 0.2 per cent earlier. The Nasdaq Composite fell 0.4 per cent as of 1:15 p.m. after rising as much as 0.5 per cent. Ten-year Treasury yields erased gains.

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