Biden to propose nearly doubling capital gains tax for the rich

US President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6 percent, sources tell Bloomberg News.

President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6%, which, coupled with an existing surtax on investment income, means that federal tax rates for investors could be as high as 43.4%, according to people familiar with the proposal. The plan would boost the capital gains rate to 39.6% for those earning $1 million or more, an increase from the current base rate of 20%, the people said on the condition of anonymity because the plan is not yet public. A 3.8% 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 0.7% as of 1:43 p.m. after climbing 0.2% earlier. The Nasdaq Composite fell 0.6% after rising as much as 0.5%. Ten-year Treasury yields erased gains.