Wall Street on Tax Plan: ‘It Will Incentivize Selling This Year’
- President said to propose doubling capital gain tax rate
- Could have ‘chilling’ effect on how people invest: Samana
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President Joe Biden’s likely proposal to nearly double the tax on capital gains lopped a quick 30 points of the S&P 500. Wall Street traders, predictably focused on the policy’s implications for investing, said it was too soon to panic, but that prospects of a higher levy on stock profits could foment near-term selling as investors look to skirt a higher rate.
The benchmark index for U.S. equities slid from about 4,180 to 4,150 in the minutes after Bloomberg reported Biden will propose almost doubling the capital gains tax rate to 39.6% for those earning $1 million or more, an increase from the current base rate of 20%.