Biden’s capital gains tax hike could spark a big sell-off in stocks. Here’s what that means for the market

cnbc ^

[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%.

[roadcat]

Right now most people over the 100k income bracket are planning to vote Democrat.

Speak for yourself, not me. Members of my family all make six-figures and are all Republican. That includes my wife and I. If Biden gets elected, then I'll be doing a sell-off of my stocks before a Biden tax hike happens. But most people I know are voting for Trump. I earned my money, unlike Biden.

[amnestynone]

https://townhall.com/columnists/terryjeffrey/2018/12/27/party-of-the-rich-democrats-hold-the-20-wealthiest-congressional-districts-n2538070

[Gay State Conservative]

Now that Rat Party (and RINO) Governors have brought the nation's economy to its knees a tax hike is just what the patients needs.

[amnestynone]

Than why are almost all of the wealthy suburbs moving Democrat? Look at Beverly Hills and Manhattan and California including Silicon Valley and Hollywood all are Democrat. I do not trust those statistics you give all I need to do is look at the results.

[JohnGallt]

“If you change the tax rate it went from 38 percent to 21. If you just send it back to 20 uh — 38%, um, if you — 36% to 28, that’s what we started trying to do.” - Slow Joe

[fluffy]

Pointing to a few districts in California and DC is like pointing to Massachusets and saying “see, white people vote democrat”. You have to look at the aggregate, not a few cherry picked areas.

[montag813]

Looks like the market is deeply concerned about the Democrats stealing this election.

[alternatives?]

They increase inflation and then tax the inflation.

[funfan]

And they will blamed it on the Trump economy

[cherry]

what category is oil dividends in?...my liberal sil with the inherited oil wells deserves a nice big fat comeuppance.

[funfan]

That’s not true

[cherry]

look at the way votes went down last election ...the richest areas in the nation are rats....

the big lie....that the rats support the middle and lower class....they do not....they are bought and sold like toilet paper.

[Chgogal]

Good for CNBC. About time a MSM channel talks economics. I despise my fellow Americans who support piss poor economic policies that are anti growth, it ain’t rocket science, dummycRATs.

[dinodino]

Not seeing this, and seeing quite the opposite. Can you tell me what your friends are saying?

[KC_Lion]

+1!

[SkyDancer]

Read the book FDR’s Folly: How Roosevelt and his New Deal Prolonged the Great Depression.

[ridesthemiles]

BUT-—IF the stick went down-—they don’t wish to credit you with that change.

[The Antiyuppie]

f Biden gets elected, then I’ll be doing a sell-off of my stocks before a Biden tax hike happens. But most people I know are voting for Trump. I earned my money, unlike Biden.

Problem is, so will everybody else and their mom, giving a great opportunity to 30 year olds in M+P’s basement to get into stocks cheap. Very cheap.

[adorno]

Biden’s capital gains tax hike could spark a big sell-off in stocks

The democrat dummies that Biden and the democrat party are playing to, don't understand what stocks are for. So, sticking it to the stockholders feels good to them.

What democrat leaders always 'fail to mention' to their voters, is that, stocks are the same as investments into corporations, and without those investments, millions of jobs would not exist, and hundreds of billions of dollars would not be collected in taxes, and many government services and benefits would not exist.

[The Antiyuppie]

“...my liberal sil with the inherited oil wells deserves a nice big fat comeuppance.”

How does she sleep at night? Seriously.