No, President Biden has not enacted a capital gains tax increase, but he has repeatedly proposed significant hikes, particularly for high-income earners, aiming to tax large capital gains at the same top ordinary income rate (around 39.6%) plus the Net Investment Income Tax (NIIT), which could push the total rate over 40% for some. These proposals, included in various budget plans (like FY 2025), aim to increase taxes on the wealthy, but have not become law, with the current rates remaining at 20% for most and lower for others.
President Biden has formally proposed the highest top capital gains tax in over 100 years. Here is a direct quote from the Biden 2025 budget proposal: “Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent.”
The IRS announced a raft of changes to tax rules for tax year 2026 on Thursday, including higher brackets for capital gains tax. A quick reminder of how these work. If you sell an investment you hold in a taxable account for more than you paid for it, you realize a capital gain.
Finance Secretary Ralph G. Recto has withdrawn the Department of Finance's (DoF) proposal to increase capital gains tax, donor's tax and estate tax, citing higher revenue collections in the first quarter.
On a $100,000 capital gain, you'll likely pay 15% for long-term gains, resulting in about $15,000 in federal tax (plus potential state tax), but it could be 0% or 20% depending on your total taxable income and filing status, while short-term gains are taxed as ordinary income (potentially 22-24%).
The Tax Reform Act of 1986 repealed the exclusion of long-term gains, raising the maximum rate to 28% (33% for taxpayers subject to phaseouts).
The "6-year rule" for Capital Gains Tax (CGT) in Australia allows you to treat a former main residence as tax-exempt for up to six years after you move out, even if you rent it out, enabling you to avoid CGT on any growth during that period. You qualify by moving out, choosing to treat it as your main home for tax, and can reset the rule by moving back in. If you rent it out for longer than six years, only the portion of the gain after the six-year mark becomes taxable.
Rep. Craig Goldman (R-Texas) introduced legislation this week, dubbed the Don't Tax the American Dream Act, that would eliminate federal capital gains taxes on the sale of primary residences.
Seven major tax cuts took effect for 2025 under the OBBBA:
Trump's tax law leaves existing capital gains tax rates and income tax brackets unchanged. Capital gains remain a key consideration for investors, especially those with taxable brokerage accounts, real estate holdings or long-term investment portfolios.
The Tax Reform Act of 1986, signed by President Ronald Reagan, raised tax rates on capital gains and lowered rates on ordinary income but set the same 28 percent top rate for both. The goal: reducing tax planning devoted to converting ordinary income to capital gains. The policy worked—briefly.
Capital gains tax rates
A capital gains rate of 0% applies if your taxable income is less than or equal to: $48,350 for single and married filing separately; $96,700 for married filing jointly and qualifying surviving spouse; and. $64,750 for head of household.
The 20% rule for capital gains refers to the highest federal tax rate for long-term capital gains, applying to higher income brackets when you sell investments (stocks, real estate) held for over a year, with lower rates of 0% and 15% for lower incomes, and even higher rates for special assets like collectibles. This rate kicks in for single filers earning over approximately $492,300 (2024) or $533,401 (2025), and higher for joint filers, making holding assets over a year a key tax strategy.
It is true that President Biden has proposed increasing the capital gains tax, and it is very reasonable to think about how to respond to these potential rate increases.
On a $100,000 capital gain, you'll likely pay 15% for long-term gains, resulting in about $15,000 in federal tax (plus potential state tax), but it could be 0% or 20% depending on your total taxable income and filing status, while short-term gains are taxed as ordinary income (potentially 22-24%).
A common way to defer or reduce your capital gains taxes is to use tax-advantaged accounts. Retirement accounts such as 401(k) plans, and individual retirement accounts offer tax-deferred investment. You don't pay income or capital gains taxes on assets while they remain in the account.
Capital gains are profits from the sale of a capital asset, such as shares of stock, a business, a parcel of land, or a work of art. Capital gains are generally included in taxable income, but in most cases, are taxed at a lower rate.
April 10, 2025, the House adopted the Senate's amended version of the budget resolution, which allows $5.3 trillion in deficit-financed tax cuts (the combination of $3.8 trillion of tax cuts assumed to be “costless” under a current policy baseline plus $1.5 trillion in additional deficits permitted), deficit increases ...