And that's just the base Federal rate. If you add NIIT at 3.8%, I believe that is the highest long-term capital gains rate in the developed world. And that is before you add State taxes, like the 13.3% in California.

Unlike some other countries, there is no cost-basis adjustment for inflation and there is a limited ability to deduct capital losses, both of which can be substantial for long-term investments and risk capital.

All in, this makes it very difficult to get a competitive return on long-term high-risk investments, like tech startups, biotech, etc compared to almost any other asset class. Instead, it strongly incentives cashflow and rent-seeking investments, which have better risk and tax profiles in almost every regard if this goes through.

As a second-order effect, this would cause an extraordinary amount of capital to be moved into real estate which is already experiencing very high price inflation.