President Joe Biden proposed on Friday amending the federal capital gains tax from 20% to 39.6% to help fund new child care and education initiatives expected to be revealed in his new American Families Plan education and infrastructure bill.

Capital gains tax applies only to Americans earning more than $1 million from investments in a calendar year and will most directly affect Wall Street and how much tax must be paid on an equity trade. Biden’s new proposal had an immediate effect on the stock market as the S&P 500 dropped 1% after the announcement despite having been on a steady incline for the past week.

Experts believe the Biden proposal is a starting point of negotiations with Republicans and will likely round out closer to 30% when the American Families Plan is proposed. The new education plan is expected to expand child care subsidies, make community college tuition-free and expand measures to teach U.S. workers new trades and skills.

On the campaign trail, Biden pledged to eliminate special treatment for capital gains earners, instead counting investments as traditional income.

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