Harris wants a 28% capital gains tax rate for top earners. Here’s what advisors are telling clients

Democratic presidential candidate Vice President Kamala Harris has proposed increasing the capital gains tax rate and net investment income tax to 5%. Currently, investors pay 0%, 15% or 20% for long-term capital gains, plus an extra 3.8% NIIT. Both Harris’ and Biden’s tax proposals would require congressional approval, which has caused financial advisors to wait before making any changes. Biden’s proposed higher capital gains taxes would apply to taxable income of more than $1 million per year. The potential increase in capital gains taxes could affect lower earners with a one-time sale of a business or property. There are ways to reduce yearly income and avoid the higher tax rate, such as using capital losses carried over from previous years.