By John Kartch
04/23/2024

And don’t forget to add the state capital gains tax: the Biden combined federal-state rate would exceed 50% in many states

President Biden has formally proposed the highest top capital gains tax in over 100 years.

Here is a direct quote from the Biden 2025 budget proposal: “Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent.”

https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf

Under the Biden proposal, the combined federal-state capital gains tax exceeds 50% in many states. California will face a combined federal-state rate of 59%, New Jersey 55.3%, Oregon at 54.5%, Minnesota at 54.4%, and New York state at 53.4%.

Worse, capital gains are not indexed to inflation. So Americans already get stuck paying tax on some “gains” that are not real. Biden’s high inflation makes this especially painful.

Capital gains taxes are often a form of double taxation. When capital gains come from stocks, stock mutual funds, or stock ETFs, the capital gains tax is a cascaded second layer of tax on top of the current federal corporate income tax of 21%. (Biden has also proposed a corporate income tax hike to 28%).