In a 2008 CNBC interview with Maria Bartiromo, President Barack Obama rejected raising the capital gains tax rate to “confiscatory rates” which he defined as above 28 percent:
“Here’s my belief, that we can’t go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the 28 percent… My guess would be it would be significantly lower than that.”
This should be instructive given, President Joe Biden soon plans to propose doubling the capital gains tax rate, according to Bloomberg reporters. Biden’s plan would raise the capital gains tax rate to 39.6 percent which, coupled with the existing Obamacare surtax on investment income, means that federal tax rates for investors could be as high as 43.4 percent.
In 2012, Vice President Biden and President Obama raised the capital gains tax rate rise to 20 percent.
Biden and Obama then piled on another 3.8 percent capital gains tax hike — the Net Investment Income Tax — one of the many tax increases in Obamacare. The 3.8 percent tax hike took effect Jan. 1, 2013, purposefully timed to kick in *after* the 2012 election. In his 2015 budget proposal, President Obama called for raising the capital gains tax to 28 percent.
Despite his support for higher capital gains taxes, Obama realized the economic damage the tax could cause.
On the other hand, Joe Biden wants to raise the capital gains tax to 43.4 percent, which would be the highest rate since 1977 when Jimmy Carter was President and the top rate was 39.875 percent.
Inclusive of state taxes and the 3.8 percent Obamacare tax, Californians would face a capital gains rate of 56.7 percent, New Yorkers would face a capital gains rate of 52.2 percent, New Jerseyans would face a capital gains tax rate of 54.14 percent.