Stocks fell Thursday following media reports that President Biden wants to nearly double the capital gains tax paid by wealthy Americans.

Inside the numbers: Biden reportedly is considering a proposal of a 39.6% top rate on long-term capital gains, up from the current 20% rate. He also is expected to maintain an ACA-related investment tax, bringing the total federal rate to as high as 43.4%, as first reported by Bloomberg and confirmed by Axios.

• The S&P closed down 0.92%
• The Dow fell 321 points or 0.94%

Be smart: The White House had previously signaled that individual tax hikes would be in its second infrastructure and jobs proposal, following corporate tax increases in its first one, but these percentages are larger than many anticipated.

• One possibility is that Biden is aiming high so that a compromise number will look more moderate. This arguably is what's happening with corporate rates, with the WH proposing 28% and Senate Democrats seeming to settle on 25%.
• White House Press Secretary Jen Psaki would not directly address the report during a Thursday afternoon briefing, but did emphasize Biden believes paying for infrastructure "can be on the backs" of wealthier Americans and businesses.

A big question is if this proposed capital gains rate would apply to 2021 or become effective in 2022. If it's 2022 and becomes law, expect lots of asset sales before year-end.