Top earners may face a 28% capital gains tax rate, according to advisors' recommendations to clients.

• Top earners who may be affected by Vice President Kamala Harris' call for a higher capital gains tax rate should consider financial advisors' tips.
• For households with an annual income over $1 million, Harris suggested a 28% tax on long-term capital gains, which are assets held for more than one year.
• The proposed rate for the group is lower than the 39.6% rate suggested by President Joe Biden in his fiscal year 2025 budget.

Top earners who may be affected by Vice President Kamala Harris' call for a higher capital gains tax rate should consider financial advisors' tips.

For households earning over $1 million annually, the Democratic presidential nominee has proposed a 28% tax on long-term capital gains, an increase from the current 20% rate for top earners.

Harris stated at a New Hampshire campaign event on Wednesday that we will impose a tax on capital gains at a rate that incentivizes investment in American innovators, entrepreneurs, and small businesses.

Harris' plan to tax unrealized gains affects wealthy Americans. Wealthy Americans can funnel money to the 'gold standard' of retirement accounts. Seven Republican-led states sue to block Biden's student loan forgiveness.

Although Harris' tax policy generally mirrors Biden's, her proposed capital gains rate is lower than the 39.6% rate proposed in Biden's 2025 budget.

The Harris campaign did not respond to CNBC's request for comment.

'We don't make any changes until the law has passed'

The Wall Street Journal reported on Wednesday that Harris' plan would increase the net investment income tax, or NIIT, from 3.8% to 5% for long-term capital gains, affecting single filers with MAGI over $200,000 and married couples filing together with MAGI over $250,000.

After 2025, the tax rates for profitable assets owned for one year or less will increase unless Congress takes action.

Financial advisors are monitoring Biden and Harris' tax proposals, which require Congressional approval, due to the uncertain future control of the Senate and the House.

Louis Barajas, CEO of International Private Wealth Advisors in Irvine, California, stated that no changes will be made until the law has passed, as a certified financial planner and enrolled agent.

Barajas, a member of CNBC's Financial Advisor Council, stated that there are sometimes knee-jerk reactions to certain proposals.

Despite Former President Donald Trump's broad support for tax cuts, he has not presented a capital gains tax proposal.

The Heritage Foundation, along with over 100 other right-leaning organizations, created a "vision for a conservative administration" known as Project 2025, which addressed the topic.

The plan for Project 2025 includes a 15% tax on capital gains and qualified dividends for higher earners, as well as the abolition of the NIIT.

Numerous ex-Trump administration members have been linked to Project 2025, yet Trump has disavowed the initiative.

Who could be hit with higher capital gains taxes

According to the U.S. Department of the Treasury, Biden's proposed higher capital gains taxes would apply to taxable income exceeding $1 million per year or $500,000 for married couples filing separately, with these amounts being adjusted for inflation.

Experts warn that a proposed higher capital gains tax could negatively affect lower earners who sell a business or commercial property only once.

Barajas stated that there will be more tax planning for individuals in their 60s and 70s who own rental properties and plan to sell them. However, timing a sale based on other income could affect the final profit.

If someone has $1.1 million of taxable income and $200,000 of that is capital gains, they would owe the higher rate on $100,000, according to the Treasury.

According to CFP John Chichester Jr., founder and CEO of Chichester Financial Group in Phoenix, if someone has over $1 million, it could come from various sources, including stock sales and required minimum distributions, among others. He is also a certified public accountant.

Some individual assets could provide tax-loss harvesting opportunities, as there are several ways to reduce your yearly income and avoid the higher tax rate, such as utilizing capital losses carried over from previous years, he said.