President Biden’s Budget Proposal Includes Highest Capital Gains Tax in Over 100 Years

President Biden’s proposed capital gains tax hike in his 2025 budget proposal has sent shockwaves through the investment community, with wealthy investors bracing for a significant hit to their pockets. The proposal includes increasing the top marginal rate on long-term capital gains and qualified dividends to 44.6%, the highest in over a century.

This tax increase would push the combined federal and state capital gains tax rate above 50% in many states, including California, New Jersey, Oregon, Minnesota, and New York. The impact of this tax hike would be felt not only by high-earning stock and crypto investors but also by families inheriting assets, as the proposal includes a second Death Tax that eliminates stepped-up basis when parents pass away.

In addition to the capital gains tax hike, the budget proposal seeks to raise the corporate income tax rate to 28%. The proposal also aims to eliminate a special tax subsidy for cryptocurrency transactions, aligning crypto assets with stocks and other securities in terms of tax treatment.

The IRS has released a draft tax form, Form 1099-DA, which would require taxpayers to provide detailed transaction data from crypto “brokers.” This move has raised concerns about privacy and security, as the form includes data points such as digital asset addresses and transaction IDs.

Overall, the proposed tax changes could have far-reaching implications for investors and the crypto industry, with experts warning of significant changes in how users interact with crypto platforms. The debate over the tax proposal is likely to intensify as lawmakers and stakeholders weigh the potential impact on the economy and individual investors.