Kamala Harris Calls for 28% Capital Gains Tax, Diverging from Higher Biden Rate

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In a notable policy shift, Democratic presidential nominee, Vice President Kamala Harris, has proposed a 28% capital gains tax rate for some high earners, departing from President Joe Biden's more aggressive stance on taxing investment income.

The move came as the 2024 presidential election campaign gained momentum and economic policies, including Harris’ proposal for several new tax credits, took center stage.

Here’s more of what you need to know.

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Kamala Harris capital gains tax

The Vice President has proposed a 28% rate for long-term capital gains for those earning a million dollars or more a year — an increase from the current top capital gains tax rate of 20%.

However, this proposed rate falls short of the nearly 40% rate previously suggested by the Biden administration in Biden’s FY25 budget proposal.

“We will tax capital gains at a rate that rewards investment in America’s innovators, founders, and small businesses,” Harris said at a campaign rally in New Hampshire.

Capital gains taxes are levied on profits from selling assets like stocks, mutual funds, and real estate.
The rate depends on your taxable income and how long you've held the asset.
However, capital gains tax rates are generally lower than the federal income tax rates for ordinary income like wages.

As Kiplinger has reported, President Biden's capital gains tax plan called for nearly doubling the top rate to 39.6%. When combined with a proposed Net Investment Income Tax increase to 5%, the wealthiest Americans' total rate could have been 44.6%.

Sanders on Kamala Harris rate

What did Bernie Sanders say? Notably, Sen. Bernie Sanders (I-Vt.) told NBC's Meet the Press that he would "go higher than that" referring to Harris' proposed 28% capital gains tax rate for high earners.

Sanders has previously proposed taxing capital gains at ordinary income tax rates for households earning $250,000 or more a year.

Current capital gains tax

Long-term capital gains tax rates apply to assets held for more than a year.

Currently, the rates are 0%, 15%, or 20%, depending on your income level; essentially, the higher your income, the higher your rate.

The income thresholds for long-term capital gains are adjusted annually for inflation.

Also, the Net Investment Income surtax (NIIT) is currently 3.8%. It applies to individuals, trusts, and estates with certain investment income above specific modified adjusted gross income (MAGI) threshold amounts.

Kamala Harris 'wealth tax'?

Harris says her plan for making the “tax code more fair,” including a so-called “Billionaire Minimum Tax,” is designed to balance raising revenue and maintaining investment incentives.

President Biden's budget proposal, some of which the Harris campaign has generally supported, includes a Billionaire Minimum Tax for households with a net worth of over $100 million. Biden’s proposed tax rate would be at least 25%, a notable increase for the wealthiest taxpayers, who reportedly pay an average tax rate of about 8.2%, according to the White House.

Note: Such a minimum tax would implicate the controversial idea of taxing unrealized gains. For more information, see Kiplinger’s report Unrealized Gains Tax: One Important Thing to Know Now.

Overall, proponents suggest Harris’ plan could:

Generate additional revenue to fund social programs
Reduce income inequality
Preserve incentives for long-term investment and entrepreneurship

Critics, however, argue that increasing capital gains tax rates could discourage investment (e.g., some might hold onto assets longer to avoid realizing gains) and potentially hamper economic growth.

Trump on capital gains

Meanwhile, former president and Republican presidential nominee Donald Trump will likely support a 15% reduced capital gains tax rate. That would be a significant cut from the current top rate of 20% for long-term capital gains.

That proposal is also part of a broader conservative tax agenda (some described in Project 2025, from which Trump has tried to distance himself ) that some say would shift U.S. tax policy towards a consumption model.

It's also worth noting that in a September speech before the Economic Club of New York, Trump pledged to reduce the corporate tax rate to 15% (from the current 21%) for companies that make products in the U.S.

Some critics see this potential capital gains tax cut as primarily benefiting high-income earners since most taxpayers already pay 15% or less on their capital gains.
Some proponents suggest a lower capital gains tax rate could stimulate investment and economic growth.

Capital gains tax rates: Bottom line

Harris' 28% long-term rate proposal adds another dimension to discussions that already include the TCJA tax cliff, Trump's vow to end taxes on Social Security benefits, and both candidates' pledge to eliminate federal tax on tips.

However, whatever side of the political aisle you’re on, it’s good to remember that any changes to the already complicated U.S. tax code would likely face intense lobbying from groups who benefit from the current lower rates.

Most importantly, implementing a new capital gains tax rate or Billionaire Minimum Tax would require congressional approval, which could be challenging given the current political landscape.

If you're worried about your tax liability, consult a trusted financial advisor or tax planner.

Kelley R. Taylor is the senior tax editor at Kiplinger.com, where she breaks down federal and state tax rules and news to help readers navigate their finances with confidence. A corporate attorney and business journalist with more than 20 years of experience, Kelley has helped taxpayers make sense of shifting U.S. tax law and policy from the Affordable Care Act (ACA) and the Tax Cuts and Jobs Act (TCJA), to SECURE 2.0, the Inflation Reduction Act, and most recently, the 2025 “Big, Beautiful Bill.” She has covered issues ranging from partnerships, carried interest, compensation and benefits, and tax‑exempt organizations to RMDs, capital gains taxes, and energy tax credits. Her award‑winning work has been featured in numerous national and specialty publications.