Biden Calls for 44.6% Capital Gains Tax Rate, Highest Capital Gains Tax Since Its Creation in 1922

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 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.”

Yes, you read that correctly: A Biden capital gains and dividends tax rate of 44.6%

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%.

Making matters worse, the capital gains tax is not indexed to inflation. So Americans get stuck paying tax on some “gains” that are not real. Biden’s inflation makes this especially painful.

The Biden rate is more than twice as high as China’s rate. China’s capital gains tax rate is 20%. Is it wise to have higher taxes than China? And with Biden’s combined federal-state capital gains rate of 59% in California, residents will face a rate nearly three times as high as China.

The capital gains tax was created as its own tax in 1922, at a rate of 12.5%. See the chart below to see how Biden’s proposed capital gains tax for 2025 puts the United States in uncharted territory.