Key Takeaways
- Biden proposes a capital gains tax increase to 44.6% for high earners.
- The new tax rules aim to treat Bitcoin similarly to stocks and securities.
- Potential tax rates over 50% could significantly impact the market.
On April 24, 2024, President Biden proposed a significant increase in the capital gains tax rate to 44.6%.
This rate is detailed in the 2025 U.S. budget proposal.
Impact on high earners and Bitcoin
The increase targets taxpayers with incomes over $1 million, proposing a base rate of 37% with additional taxes on investment income over $400,000.
The plan also seeks to modify Bitcoin’s tax treatment by eliminating certain tax subsidies.
Potential effects on investors
The proposed rate marks a sharp increase from the current 20% cap on long-term capital gains.
If enacted, the combined federal-state rate could exceed 50% in many states.
This unprecedented hike could notably affect both stock market and Bitcoin investors, adding complexity without adjusting for inflation.
