Tax capital gains at the (higher) ordinary income rate for income over $200,000
Arguments For & Against
Pro Argument
Taxing capital gains and dividends at the same rate as wage income would generate significant additional revenue, especially from high-income individuals. For example, taxing capital gains as ordinary income for those earning above $1 million would raise an estimated $120 billion.
Con Argument
More important than reducing the deficit is for the government to continue making investments that ensure the economy continues to grow and that more people are brought into the workforce. There are seven million people who are unemployed or underemployed and wages are only just starting to keep up with inflation. Cutting government spending or raising taxes could weaken the economy and reduce investments. We shouldn’t be obsessive about reducing the deficit. Our interest payments, as a percentage of GDP, are similar to how they have been historically.
Source document: FedBudget2025Quaire.pdf
| Type | Organization | Date | Nat | Rep | Dem | Gap | Metric |
|---|---|---|---|---|---|---|---|
| New PPC Survey (2026) | Program for Public Consultation | February 2026 | – | – | – | – | other |
| New PPC Survey (2026) | Program for Public Consultation | February 2026 | 64% | 61% | 69% | 8% | favor |
| New PPC Survey (2026) | Program for Public Consultation | February 2026 | 72% | 65% | 79% | 14% | favor |
| New PPC Survey (2026) | Program for Public Consultation | February 2026 | 76% | 70% | 83% | 13% | favor |
| Deliberative Survey | Program for Public Consultation | June 2025 | 60% | 59% | 63% | 4% | other |
Program for Public Consultation — February 2026
Do you favor raising the tax on capital gains by taxing them at the same rate as ordinary income, for the following income groups:
Program for Public Consultation — February 2026
Households with incomes of $200,000 to $500,000
Program for Public Consultation — February 2026
Households with incomes of $500,000 to 1 million
Program for Public Consultation — February 2026
Households with incomes of $1 million or more
Program for Public Consultation — June 2025
There is a proposal for changing the tax rate for capital gains and dividends, by taxing them at the same rate that income from wages and salaries are taxed. This would increase revenues. You can now choose whether you favor this change and for which income levels.