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Around 75 percent of investors in the US would not be subject to President Biden's proposed capital gains tax hike, according to CNBC.

Last week, President Joe Biden sent markets tumbling when he announced plans to raise the capital gains tax from 20 percent to 39.6 percent for millionaires. When considering other tax implications, the top tax rate would be 43.6 percent.

In a note published by UBS on Friday, 75 percent of US investors wouldn't be subject to the increase in capital gains tax. "If you’re not making $1 million a year you don’t have to worry about this extra tax," said Paul Auslander director of financial planning at Provise Management Group.

Retirement accounts would not be subject to the tax along with endowments and foreign investors. “If the average American owns stock, stock mutual funds or exchange-traded funds in a qualified [retirement] plan, it doesn’t have any impact,” said Auslander.

However, the remaining 25 percent of investors would be subject to the capital gains tax. Biden's policy specifically targets individuals that make more than $1 million per year. The most recent data from the IRS showed 540,000 taxpayers above this income level. That figure represents 0.3 percent of the 154 million individuals that filed tax returns in 2018. Biden proposed this capital gains increase to fund his American Families Plan, expected to cost around $1 trillion.

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