Joe Biden’s Capital Gains Tax Bomb Drops The Market
Last Thursday President Biden’s team released info on a proposed major increase to the long-term capital gains tax to as high as 43.4% for “wealthy” Americans.
This would be even higher than the top federal tax rate on incomes earned through wages.
This news sent markets falling by around 350 points on the day.
Because if passed, this would more than double the current long term capital gains tax from 20% now to as high as 43.4%. And this lowers the investment returns people can expect to earn.
Which lowers the amount people will invest.
One estimate I saw, showed that this tax could lower S&P 500 returns in a real-world sense by about 7%.
That would be like the market crashing 7%. Or from around the 4,200-point level for the S&P 500 to around 3,900 points.
So far specifics are light because this will still be decided by those in the House of Representatives and Senate – even if it’s passed at all.
But as of now this would affect those earning $1 million or more per year.
These are the people who invest the most, which is why its estimated to take a 7% chunk out of the market if passed into law.
Over the last several weeks I’ve shown you many reasons to keep your guard up so you can protect your retirement portfolio in these uncertain times.
- Stock market valuations at or near all-time records.
- Inflation is rising rapidly.
- Debt levels continue to go straight up and now sit at a combined $281 trillion worldwide.
- Interest rates are rising.
- And so are Covid cases and deaths.
I didn’t see this coming though which shows you there are even more things to worry about.
To see some of the best stocks I’ve found that will help protect your retirement portfolio from all these risks – Click the links below.
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Disclosure – Jason Rivera is a 14+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.