If there's a 'blue wave' election and tax rates head higher, dividend stocks could take a hit

Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020.
Brendan McDermid | Reuters

(This story is for CNBC Pro subscribers only).

History shows that raising taxes on investment income always hurts dividend stocks, according to Bank of America, a pattern that could come into play if Democrats take the White House and the Senate.

Democrat Joe Biden's tax plan calls for raising the rate of the top income bracket to nearly 40% and making high earners pay a tax rate on capital gains as if it were normal income. He has also proposed raising the corporate tax rate to 28%.