Posted on 09/21/2020 5:09:54 PM PDT by Red in Blue PA
Democratic presidential nominee Joe Biden’s plan to increase the capital gains tax could lead to a large-scale sell-off of stocks, according to economic analyses.
As part of his $4 trillion tax plan, Biden has proposed increasing the top tax rate for capital gains for the highest earners to 39.6% from 23.8%, the largest real increase in capital gains rates in history. Economic analyses show that capital gains tax hikes cause a burst of stock-selling in advance of the increase, as investors look to lock in the lower existing tax rates before they rise.
A research paper by Tim Dowd, a senior economist at the U.S. Congress Joint Committee on Taxation, and Robert McClelland, a senior fellow at the Urban-Brookings Tax Policy Center, found that the two previous hikes in capital gains taxes lead to a wave of selling.
In 1986, as part of the Reagan tax plan, the top rate for capital gains jumped from 20% in 1986 to 28% in 1987. In the months before the increase, capital gains realizations — or sales of stocks and other assets — surged by 60%. In 2012, as part of the fiscal cliff negotiations, the top rate went from 15% to 23.8%. Again, in the months leading before the change, capital gains realizations and sales jumped, by 40%.
(Excerpt) Read more at cnbc.com ...
Howard County..?
How’d you guess
Tell it to the idiots on Wall Street who support him.
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