The stock market took a nosedive on Thursday afternoon after a report revealing how President Joe Biden’s plans to pay for his progressive agenda. With this, experts sent out a warning about the president’s capital gains tax hike proposal. They said it could cause serious negative ramifications for the United States.
According to a Bloomberg News report, the president plans to propose the near doubling of the capital gains tax rate for people who are wealthy. It will go up to 39.6% and it aims to pay for most of the spending for programs “that addresses long-standing inequality.”
According to the report, those earning more than $1 million could see a new top rate as high as 43.4%. The proposed 39.6% marginal rate would be considered an increase from the current 20% base rate.
After the said report rolled out, the stock market took a nosedive, with Dow’s overall value going down by 1%.
Many stock market experts then said the plan proposed by the president could hurt businesses and its ecosystem.
Scott Minerd, the overseer of Guggenheim Partners’ $310 billion-worth of assets called the move insane. He said the proposal would likely decrease tax revenues over time. It may also discourage people from setting aside money for long-term investments.
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SkyBridge Capital hedge fund founder Anthony Scaramucci also reacted to the proposal. He said the increase potentially has damaging effects on the creation of jobs and wage growth among the middle-class.