President Joe Biden is proposing to nearly double the tax rate the highest-earning Americans pay on profits made from stocks and other investments.
It’s part of Biden’s efforts to tax wealthy people and corporations to pay for infrastructure investments and programs aimed at helping the broader economy.
Even though the possibility of higher capital-gains tax rates has been telegraphed for a long time, reports of its pending unveiling shook up the stock market, with the S&P 500 falling to a nearly 1% loss on Thursday.
So if you bought a share of Tesla at $200 early last year and are sitting on a profit of more than $500, you won’t owe anything unless you sell.
If you do sell, and you are one of the highest-earning Americans, current law says you’d pay a 23.8% tax on a $500 profit, or $119.
Biden wants to raise the tax rate on long-term capital gains for Americans who make more than $1 million in a year.
Altogether, the White House says the tax law changes focusing on higher-earning Americans would raise about $1.5 trillion across the decade.