The Biden Administration has reportedly proposed significant changes to the capital gains tax, aiming to target the wealthiest Americans to help fund his historic aid programs.

Historically, long-term capital gains, or gains on assets held for over a year, have enjoyed preferential tax rates in comparison to short-term capital gains, which are assets held for less than a year.

In Biden’s original proposal, he suggests raising the long-term capital gains rate to the highest ordinary income tax rate on income over $1 million.

If Biden’s changes are enacted, it means that there would no longer be preferential tax rates for those that make over $1 million on the sale of their shares post-IPO or as part of an acquisition.

Many employees “go long” with their equity, selling them a year after exercising to benefit from long-term capital gains tax.

Even if rates to capital gains taxes change, exercising early may still have its benefits, as many employees may still be able to create a plan to sell up to a certain number of shares at preferential rates every year.

While Biden’s proposed plan is focused on changing the federal tax rates, state income tax considerations remain.