Under Biden's Tax Plan, 13 States Would See Combined Capital Gains Tax Rate Above 50%

President Joe Biden is reportedly eying almost doubling the capital gains tax rate for wealthy Americans to help fund infrastructure investments and other key agenda items.

The plan would result in 13 states and the District of Columbia having a combined capital gains tax rate at or above 50 percent, according to a recent analysis published by the Tax Foundation.

Those states, the right-leaning think tank found, are California, Connecticut, Delaware, Hawaii, Idaho, Maine, Minnesota, Montana, Nebraska, New Jersey, New York, Oregon and Vermont.

California would have the highest combined capital gains tax rate of 56.7 percent, followed by New York and New Jersey with 54.3 percent and 54.2 percent, respectively.

In some cities, the top combined rates could be even higher. New York City would have a capital gains rate of roughly 58 percent.

The Tax Foundation said in its report that "raising the top capital gains tax rate to 39.6 percent for those earning over $1 million would reduce long-run [gross domestic product] by about 0.1 percent and reduce federal revenue by about $124 billion over 10 years."

"Under Biden's proposal for capital gains, the U.S. economy would be smaller, American incomes would be reduced, and federal revenue would also drop due to fewer capital gains realizations," the think tank said.

According to multiple reports, Biden will propose raising the capital gains tax rate to 39.6 percent for those earning more than $1 million. Combined with the existing surtax on investment income, the new top rate could be as high as 43.4 percent.

If enacted, Reuters reported, Biden's plan would be the highest tax rate on investment gains since the 1920s. The president is expected to release the proposal formally sometime this week.

The tax increase would be a way to fund Biden's "American Families Plan," which calls for allocating hundreds of billions of dollars to child care, prekindergarten, paid family leave and tuition-free community college. While details haven't been finalized, it's expected to have a price tag of roughly $1.8 trillion.

The White House has already rolled out plans for a corporate tax hike to help pay for Biden's $2 trillion "American Jobs Plan." The infrastructure-focused proposal would devote billions of dollars to upgrade highways, airports, broadband access, drinking water systems and other projects—to be paid for by raising the corporate tax rate from 21 percent to 28 percent.

But Republicans and members of Wall Street are already voicing opposition to raising taxes. GOP lawmakers last week presented their own $568 billion infrastructure plan, in which they ruled out any corporate tax increases and said the legislation should be paid for by user fees and already-appropriated funds from the last COVID-19 relief measure.

Newsweek reached out to the White House for comment on Biden's tax plan but did not receive a response before publication.