President Biden is set to propose a hike that would nearly double the capital gains tax, according to a report from Bloomberg.
The increase would move the capital gains tax from 20% to 39.6% on income more than $1 million. Combined with an existing taxes on investment income, some rates could be as high as 43.4%, according to people familiar with the proposal.
State tax rates could drive those percentages up even further, with New Yorkers seeing a combined state and federal capital gains rate as high as 52.22% and Californians seeing 56.7%.
White House press secretary Jen Psaki declined to confirm the report in a press briefing on Thursday.
"We're still finalizing what the pay-fors look like, but I will say that the president's calculation is that there's a need to modernize our infrastructure, there's a need to invest in child care, there's a need to invest in early childhood education and making our kids and the workers of the next generation more competitive. And he should propose a way to pay for it," Psaki said.
"His view is … that can be on the backs of the wealthiest Americans who can afford it, and corporations and businesses who can afford it. And his view and the view of our economic team is that that won't have a negative impact. There are alternative views or there are proposals that don't exist yet on how to pay for it. That will be a part of the discussion. But he stays firm to his commitment to not raise taxes on Americans making under $400,000 a year, and he'll have a range of proposals on how to pay for his plans to invest in education and child care."
The leaked plan prompted investors to unload stocks on Thursday, dropping the Dow Jones Industrial Average nearly 1%.