This is incorrect, capital gains rates in the US are currently similar to or higher than many European countries. Federal (20%) + NIIT (3.8%) + State (up to 13.3%) puts you firmly in the middle of the pack for European countries. The proposed changes would make them the highest in the developed world, by a large margin.
The elephant in the room is that the main difference between US and European tax rates is that the middle-class tax rates in the US are much lower than their European counterparts. If you are in the top tax bracket in California, the income taxes aren’t that much different than in most of Europe and the capital gains taxes are typically lower.
The full amount of a short-term capital gain (property held for less than 1 year) is taxed as regular income. Long-term capital gains are taxed at a lower rate than regular income, but the amount depends on your tax bracket. Long-term capital gains in the 10% and 15% tax bracket aren’t taxed at all, those in the highest tax bracket are taxed at 20%, and everything in between is 15%.
In the US, capital losses can reduce capital gains and up to $3000 of regular income. If losses are $3000 more than gains, you can carry them forward to future years.
If you make 90,000 in Florida City, Florida. You purchase a home for 100,000 sold for 200,000 your capital gains is:
$15,000
15% federal
0% state
0% local
In VermountVille New York State
21409
15% federal
6.41% state
0 local
In Sf 24,500
21,000 if you are married.
In order to pay 36% you have to be earning over 500,000 to pay that rate and single.
The elephant in the room is that the main difference between US and European tax rates is that the middle-class tax rates in the US are much lower than their European counterparts. If you are in the top tax bracket in California, the income taxes aren’t that much different than in most of Europe and the capital gains taxes are typically lower.