Title: Kamala Harris Considers Less Drastic Capital Gains Tax Increase - What Investors Need to Know
Investing.com -- According to the Wall Street Journal, Democratic presidential nominee Kamala Harris is contemplating a more moderate hike in the top capital-gains tax rate to find a balance between taxing the wealthy and encouraging investment.
A spokesperson for the Harris campaign declined to comment on the report, signaling a departure from President Joe Biden's proposed changes to current capital-gains laws.
Currently, the highest long-term capital-gains tax rate stands at 23.8% on realized gains, while unrealized gains are not taxed. Biden's budget proposals sought to tax capital gains at ordinary income tax rates for households with taxable income above $1 million, potentially raising the top tax rate to 39.6% from the current 37% proposed by Democrats.
Sources familiar with the matter revealed that Harris's updated proposal would maintain the $1 million threshold but suggest a lower top tax rate.
Analysis:
Kamala Harris's potential adjustment to the capital gains tax rate could have significant implications for high-income individuals and investors. If implemented, this change could impact the after-tax returns on investments and alter the overall tax burden for those with substantial capital gains. It is essential for investors to stay informed about proposed tax changes and consult with financial advisors to strategize and optimize their investment portfolios accordingly.