Biden to set $1 million threshold for capital gains tax hike

President Joe Biden intends to raise capital gains taxes for those earning more than $1 million a year, his top economic adviser confirmed Monday.

Brian Deese, the director of the National Economic Council, said at a press briefing that Biden’s forthcoming tax plan would set the new threshold for higher capital gains taxes. Revenue would go toward funding sweeping new social-spending measures that the president is set to unveil in a joint congressional address Wednesday.

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Deese didn’t specify whether the income threshold is for individuals or for households. But he described the increase as affecting “three-tenths of a percent of taxpayers,” or about 500,000 U.S. households.

“The reforms that the president will lay out are focused on this top sliver of people, and treating capital gains the same as wages for that top three-tenths of a percent,” Deese said. “And we believe that it’s not only fair, but it would also help to reduce the kinds of tax avoidance that significantly undermines trust and fairness in the tax code itself.”

Bloomberg reported last week that the White House is planning to almost double the capital gains tax rate for wealthy individuals to 39.6%, compared with the 20% rate today. Along with a surtax to help pay for Obamacare, it means that federal tax rates for wealthy investors could be as high as 43.4%.

Revenue would “help invest directly in our kids and our families and our future economic competitiveness and put us in a position where we can drive greater economic growth,” Deese said.

Republicans have criticized the idea as economically damaging, saying it would lead to weaker investment. Stocks slid on Thursday on the news of the plan, though recovered Friday. The S&P 500 Index was up 0.2% as of 1:59 p.m. Monday.