Combined capital gains tax rate in California to hit 56.7% under Biden plan
The state's combined state, federal capital gains tax rate is now 37.1%.
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The combined state and federal capital gains tax rate in California would increase from the current 37.1% to 56.7% under President Biden’s American Families Plan, according to a new study from the Tax Foundation.
The increase – which would include federal, state and local taxes on financial gains from the sale of assets in California represented the highest levy among the 50 states, the foundation analysis also shows.
Nationwide, the combined average capital gains tax rate would be roughly 48.4% under the Democrat president’s proposal, with the top federal tax rate increasing to 43.4%, according to the report. That compares to the current combined average rate of about 29%, the study found.
Thirteen states would have a top combined capital gains tax rate above 50% if Biden’s blueprint to help U.S. families with education costs and child care were to become law, according to the foundation.
Under a foundation tax model, the nation’s gross domestic product would drop 0.1% in the long term if the top capital gains tax rate were increased to 39.6%. Federal revenue would also decline, the study show, under this scenario.
Combined Capital Gains Taxes Under Biden Families Plan, Top Five States
1. California: 37.1% to 56.7%
2. New York: 34.7% to 54.3%
3. NewJersey: 34.6% to 54.2%
4. Oregon: 33.7% to 53.3%
5. Minnesota: 33.7% to 53.3%
Source: Tax Foundation