House Democrats propose raising the top tax rate on capital gains and qualified dividends to 28.8%;

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The new rate would apply to stock and other asset sales that occur after Sept. 13, 2021, the date House Democrats introduced the tax portions of their legislation.

House Democrats on Monday proposed raising the top tax rate on capital gains and qualified dividends to 28.8%, one of several tax reforms aimed at wealthy Americans to help fund a $3.5 trillion budget plan.

The top federal rate would be 25% on long-term capital gains, which is an increase from the existing 20%. (Long-term capital gains are incurred on appreciated assets sold after more than one year of ownership.) Added to an existing 3.8% surtax on net investment income and the total tax bite would be 28.8%.

The new rate would apply to stock and other asset sales that occur after Sept. 13, 2021, the date House Democrats introduced the tax portions of their legislation.

That aligns with a Biden administration pledge not to raise taxes for households making less than $400,000. However, it’s lower than the current income thresholds at which the top rate applies.

SOURCE: CNBC