President Joe Biden will propose to nearly double the capital gains tax rate for the rich to 39.6% to cover most of the social spending to tackle inequality, Bloomberg reported, citing sources.

For those making $ 1 million or more, the new top rate, combined with the existing income tax on investment income, means federal tax rates for wealthy investors can be as high as 43.4%. The new ceiling rate of 39.6% will increase from the current base rate of 20%.

The 3.8% tax on investment income that Obamacare finances will be retained, they said, causing the tax rate on the return on financial assets to rise higher than rates on some payroll income.

This proposal could remove a longstanding provision in the tax code, according to which the tax on profit on investments is lower than on labor.

Other measures the administration has discussed in recent weeks include raising the inheritance tax for the wealthy. Biden warned that those earning more than $ 400,000 can expect higher taxes.

The White House has already unveiled plans to raise corporate taxes that will fund the $ 2.25 trillion infrastructure-oriented American employment plan.

Republicans have pushed for maintaining the 2017 tax breaks imposed by former President Donald Trump and argued that the current capital gains system encourages savings and fosters future economic growth.