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Data: FactSet; Chart: Axios Visuals

Stocks fell Thursday following media reports that President Biden wants to nearly double the capital gains tax paid by wealthy Americans.

Inside the numbers: Biden reportedly is considering a proposal of a 39.6% top rate on long-term capital gains, up from the current 20% rate. He also is expected to maintain an ACA-related investment tax, bringing the total federal rate to as high as 43.4%, as first reported by Bloomberg and confirmed by Axios.

  • The S&P closed down 0.92%
  • The Dow fell 321 points or 0.94%

Be smart: The White House had previously signaled that individual tax hikes would be in its second infrastructure and jobs proposal, following corporate tax increases in its first one, but these percentages are larger than many anticipated.

  • One possibility is that Biden is aiming high so that a compromise number will look more moderate. This arguably is what's happening with corporate rates, with the WH proposing 28% and Senate Democrats seeming to settle on 25%.
  • White House Press Secretary Jen Psaki would not directly address the report during a Thursday afternoon briefing, but did emphasize Biden believes paying for infrastructure "can be on the backs" of wealthier Americans and businesses.

A big question is if this proposed capital gains rate would apply to 2021 or become effective in 2022. If it's 2022 and becomes law, expect lots of asset sales before year-end.

Go deeper

Apr 22, 2021 - Politics & Policy

Senate Republicans unveil $568 billion infrastructure counterproposal

Sens. John Barasso and Shelley Moore Capito. Photo: Caroline Brehman/CQ Roll Call/Bloomberg via Getty Images

Senate Republicans formally rolled out the framework for their $568 billion counterproposal to President Biden's $2.5 trillion infrastructure plan on Thursday.

Why it matters: The package is far narrower than anything congressional Democrats or the White House would agree to, but it serves as a marker for what Republicans want out of a potential bipartisan deal.

Dan Primack, author of Pro Rata
Apr 22, 2021 - Economy & Business

Private equity's other tax fight

Illustration: Rae Cook/Axios

Private equity is carefully watching the D.C. debate on corporate taxes, in which Senate Democrats seem to be settling on a 25% rate.

Zoom in: Marginal rates obviously matter, but for PE it's just an appetizer before the weedier work begins on issues like corporate interest deductibility.

In photos: Long lines and fuel shortages amid Colonial Pipeline shutdown

A sign warns consumers on the avaliability of gasoline at a RaceTrac gas station in Smyrna, Georgia, on May 11. The average national price of gasoline has risen to $2.985 a gallon, Bloomberg notes. Photo: Elijah Nouvelage/AFP via Getty Images

Reports of fuel shortages across the U.S. emerged on Tuesday as the national average for gasoline prices soared to its highest level since 2014 amid a key fuel pipeline shut down, per Bloomberg.

What's happening: Operator Colonial Pipeline aims to have service restored by the week's end following last Friday's ransomware attack that shut down some 5,500 miles of pipeline from Texas to New Jersey. Florida Gov. Ron DeSantis (R) declared a state of emergency after panic-buying created a fuel shortage.