Stocks Sink on Report Biden Seeks Higher Capital Gains Tax

 Stocks fell sharply Thursday following a report that said President Joe Biden would propose a capital-gains tax of more than 40% for the wealthy.

The Dow Jones Industrial Average fell 271 points, or 0.8%, to 33,865, the S&P 500 dropped 0.7% and the Nasdaq declined 0.68%.

Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6%, and when coupled with an existing surtax on investment income, means that federal tax rates for investors could be as high as 43.4%, Bloomberg reported, citing people familiar with the proposal. 

The president's plan would lift the capital gains rate to 39.6% for those earning $1 million or more, an increase from the current base rate of 20%, the people told Bloomberg.

Louis Navellier, chief investment officer at Navellier & Associates, said he expects the president's plan to increase the capital gain tax rate to 39.6% will fail. 

"A more modest proposal to raise long-term capital gains and qualified dividend tax rates from 20% to 28%, would be much more likely to pass the Senate," Navellier said.

https://www.thestreet.com/markets/stock-market-dow-jones-earnings-jobless-claims-virus-042221