Stocks sink on news of Biden plan to hike capital gains tax

Source: The Hill | April 22, 2021 | Sylvan Lane

The Dow Jones Industrial Average, S&P 500 and Nasdaq composite all fell roughly 1 percent each shortly after the report of Biden’s plan to raise the tax for those making over $1 million.

Bloomberg News reported that Biden will call for increasing the capital gains tax to 39.6 percent for those earning $1 million or more, up from its current level of 20 percent. Investors would also be subject to a 3.8 percent tax on capital gains passed through the Affordable Care Act to fund ObamaCare.

Even though Biden had campaigned on raising the capital gains tax and several other taxes on high-earners, news of an imminent proposal turned stocks south after starting the day with solid gains.

Democrats and progressives generally support raising the capital gains tax as a way to curb growing income inequality and fund programs meant to lift economic prospects for struggling Americans that have little to nothing invested in the market.

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