evidence: In the case of capital gains taxes in particular, the changes would push the United States beyond international norms. The top combined marginal tax rate on capital gains income under current law is 29.1 percent, consisting of the 20 percent capital gains taxA capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. These taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment. rate, the 3.8 percent net investment income tax (NIIT), and the average of state and local income tax rates on capital gains. By taxing high earners’ capitals gains as ordinary income and raising the NIIT to 5 percent, Biden’s proposals would raise the top tax rate on capital gains to 49.9 percent—the highest in the OECD.