Will raising the US capital gains tax help tackle inequality?

President Joe Biden hopes that lifting rates for top earners will raise beaucoup bucks for the American Families Plan.

The near-doubling of the capital gains tax on wealthy Americans is a centrepiece of United States President Joe Biden’s $1.8 trillion American Families Plan. In his address to Congress on Wednesday evening 100 days into his term, Biden described the proposal as “fiscally responsible” and added that the wealthiest Americans will “pay their fair share”. The difference between taxes on income, which is how most Americans make their money, and capital gains — how many wealthy people grow their personal fortunes — has long been lambasted by critics as a driver of inequality.