Last week, the Biden administration sent a $7.3 trillion Fiscal Year 2025 budget request to Congress. The election-year budget contains policy proposals expected to become part of the president’s campaign for reelection this fall and sets the stage for the debate over tax policy going into 2025.

The budget proposes tax increases of approximately $4.9 trillion, with many aimed at capital gains taxes, including proposals to increase capital gains tax rates for high-income taxpayers to ordinary income rates – nearly double their current rate. The budget also proposes elimination of the tax deferral through Section 1031 like-kind exchanges and would end capital gains treatment of real estate carried interests.

Treasury Secretary Janet Yellen will testify before Congress this week on the budget and tax proposals.