NEW YORK (AFP) – Losses on Wall Street deepened on Thursday afternoon (April 22), following reports the White House will propose a steep increase in capital gains taxes on wealthy individuals.
The Biden administration is developing a plan to increase the rate on gains from stock transactions to 39.6 per cent from 20 per cent on people earnings more than US$1 million (S$1.3 million), according to reports in The New York Times and Bloomberg, citing administration officials.
Stocks have been under pressure most of the week amid concerns about lofty equity valuations and rising Covid-19 counts in India and other countries, but losses deepened after the reports.
Near 1835 GMT, the Dow Jones Industrial Average was down 0.9 per cent at 33,837.30.
The broad-based S&P 500 fell 0.8 per cent to 4,141.24, while the tech-rich Nasdaq Composite Index dropped 0.7 per cent to 13,846.62.
During the presidential campaign, Biden ran on raising taxes on the wealthy and later proposed an increase on corporate taxes as part of his US$2 trillion jobs and infrastructure plan.
“The market was reminded that this was a possibility and now this whole prospect of higher taxes is going to be sitting out there,” said Briefing.com analyst Patrick O’Hare, adding that the trading was also “an excuse to do some selling.”
The report, added National Securities’ Art Hogan, comes during a week “when the market was already taking profits.”