There’s a hot-button topic for investors that hit the news this week: President Joe Biden’s capital gains tax hike proposal.
I’m not here to talk politics or take sides because that’s not what we do at WealthPress. But this particular news item is important to Wall Street and the stock market for a few reasons…
When we make money, we have to pay taxes. When the tax rate changes — up or down, for that matter — it impacts both Main Street and Wall Street… tremendously.
So what does that mean for you and your money?
The news on Biden’s capital gains tax hike proposal came out Wednesday and he said he would like to raise the capital gains tax for “the wealthy,” people who make over $1 million. And he said he wants to double it.
Now, that’s a huge, huge — HUGE — disincentive for investors. Think about it…
There are trillions of dollars worth of long-term capital gains in the market right now because it’s basically been going up since 2009. Every time the market starts going down, the Federal Reserve prints more money and it starts to shoot up again.
Market goes down again, Fed prints more money… lowers interest rates… it does whatever it has to do to make sure the market starts going back up.
Well, pension funds, mutual funds, ETF managers, individual investors, 401(K)s… I can go on and on… but as I said, there are trillions of dollars out there already that people expect to be taxed 20% for their capital gains.
Now they might be taxed double or wherever we end up with Biden’s capital gains tax hike. So what do you think will happen once people know their taxes are going to go up?
Many people are going to sell the stocks and lock in the 20% capital gains tax rate that exists right now, before the new law would go into effect.
And that would have a major impact on your stocks and money…
Check out my short video and let’s discuss Biden’s capital gains tax hike proposal in depth, and how the policies coming out of Washington affect your bottom line.
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