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Stocks drop on Biden plan to double capital gains tax for the rich

Stocks said in a report on Thursday that President Biden plans to pay nearly twice as many wealthy people on the benefits of their investments.

Bloomberg News reports that the Dow Jones wants to raise the Biden Capital Gain Tax to 39.6 percent for people earning at least $ 1 million from the average average, deducted 321 points, down 0.9 percent to 33,815.90.

Before the report hit, major averages were trading higher, pleased with better-than-expected unemployment figures and some positive earnings reports.

But the report, which warned Obamacare of an overall top tax rate of 43.4 percent combined with the current 3.8 percent tax on investment income, sent the blue-chip Dow benchmark to the lowest point with 420 points.

The S&P 500 index ended the day down 0.9 at 4,134.98, while the Nasdaq Composite closed down 0.9 percent at 13,818.41.

The current peak capital gains rate is 20 percent.

If Baden’s tax plan becomes a reality, experts predict more sales – possibly ending a bull market that has also defined the devastating economic collapse of the coronovirus epidemic, including high unemployment.

“Biden’s proposal doubles the capital gains tax rate on incomes of $ 1 million,” the founding partner and CIO of Capain Capital Management told CNBC. “This is a major cost increase for long-term investors. Expect a sale this year if investors believe the proposal is likely to become law next year.

“The biggest risks to the stock market are the Fed taper tantrum and aggressive tax hikes,” added Onda senior market analyst Edward Moya in a note to clients.

Thursday’s capital gains news comes as investors win through a second batch of positive earnings reports.

Blackstone Group shares rose 3.3 percent after the private-equity firm’s record profit of $ 1.75 billion in the first quarter. The telecom giant said AT&T saw a 4 percent increase after adding more wireless customers and HBO Max customers in the first quarter.

Equifax shares rose 14.9 percent following shares raised by the credit-reporting agency late Wednesday and said it expected to buy back more than $ 100 million in stock.

The Labor Department said that on the work front, workers who claimed to be unemployed reached an epidemic level of 547,000 last week. The dip is a sign the job market is strengthening.

While the stock remains near record highs, there is also growing concern about an increase in coronovirus cases globally, which could delay the broader global economic recovery. India on Thursday reported the world’s largest one-day increase in new infections as COVID-19 rips through the region.