Combined capital gains tax rate in Illinois to hit 48.4% under Biden plan | Illinois

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The combined state and federal capital gains tax rate in Illinois would rise from the current 28.8 percent to 48.4 percent under President Biden’s American Families Plan, according to a new study from the Tax Foundation.

That increase, which would include federal, state and local taxes on financial gains from the sale of assets in Illinois, represented a tie for the 30th highest levy among the 50 states, the Tax Foundation’s analysis said. 

Nationwide, the combined average capital gains tax rate would amount to an estimated 48.4 percent under the president’s proposal, with the top federal tax rate increasing to 43.4 percent, according to the report. That compares to the current combined average rate of about 29 percent, the study said.

A total of 13 states would have a top combined capital gains tax rate above 50 percent if Biden’s blueprint to help U.S. families with education costs and child care were to become law, according to the Tax Foundation.

Under a foundation tax model, the nation’s gross domestic product would drop 0.1 percent in the long term if the top capital gains tax rate were increased to 39.6 percent. Federal revenue would also decline, the study said, under this scenario.

Combined Capital Gains Taxes Under Biden Families Plan

Rank State Top Capital Gains Rate (Current Law) Top Capital Gains Rate (Proposed)
1 California 37.1% 56.7%
2 New York 34.7% 54.3%
3 New Jersey 34.6% 54.2%
4 Oregon 33.7% 53.3%
5 Minnesota 33.7% 53.3%
6 Vermont 32.6% 52.2%
7 Hawaii 31.1% 50.7%
8 Maine 31.0% 50.6%
9 Connecticut 30.8% 50.4%
10 Idaho 30.7% 50.3%
11 Nebraska 30.6% 50.2%
12 Montana 30.6% 50.2%
13 Delaware 30.4% 50.0%
14 West Virginia 30.3% 49.9%
15 Arizona 29.8% 49.4%
16 Rhode Island 29.8% 49.4%
17 Georgia 29.6% 49.2%
18 (tie) Maryland 29.6% 49.2%
18 (tie) Virginia 29.6% 49.2%
20 Kansas 29.5% 49.1%
21 Missouri 29.2% 48.8%
22 Wisconsin 29.2% 48.8%
23 North Carolina 29.1% 48.7%
24 Iowa 32.3% 48.6%
25 (tie) Kentucky 28.8% 48.4%
25 (tie) Massachusetts 28.8% 48.4%
25 (tie) Mississippi 28.8% 48.4%
25 (tie) New Hampshire 28.8% 48.4%
25 (tie) Oklahoma 28.8% 48.4%
30 (tie) Illinois 28.8% 48.4%
30 (tie) Utah 28.8% 48.4%
32 Ohio 28.6% 48.2%
33 Colorado 28.4% 48.0%
34 Michigan 28.1% 47.7%
35 South Carolina 27.7% 47.3%
36 Louisiana 29.8% 47.0%
37 New Mexico 27.3% 46.9%
38 Indiana 27.0% 46.6%
39 Pennsylvania 26.9% 46.5%
40 Alabama 28.8% 46.4%
41 Arkansas 26.8% 46.4%
42 North Dakota 25.5% 45.1%
43 (tie) Alaska 23.8% 43.4%
43 (tie) Florida 23.8% 43.4%
43 (tie) Nevada 23.8% 43.4%
43 (tie) South Dakota 23.8% 43.4%
43 (tie) Tennessee 23.8% 43.4%
43 (tie) Texas 23.8% 43.4%
43 (tie) Washington 23.8% 43.4%
43 (tie) Wyoming 23.8% 43.4%

Source: Tax Foundation



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Caleb Alexander

Caleb Alexander

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