US equity markets hit a vacuum to the downside briefly this morning shortly after headlines that the $6 trillion Biden budget malarkey includes the assumption that a retroactive capital gains tax hike would be included (which would have started in April).
The Wall Street Journal reports that President Biden's budget assumes that his proposed capital-gains tax rate increase took effect in late April, meaning that it would already be too late for high-income investors to realize gains at the lower tax rates if Congress agrees, according to two people familiar with the proposal.
Mr. Biden's plan would raise the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million. He would also change the tax rules for unrealized capital gains held until death.
The market took a quick dislike to that idea...
That suggests the odds of getting the budget through as is are lower, as Congress must still approve any rate changes and retroactive effective dates, and there is already reluctance building among some congressional Democrats.
But, as one can see in the chart - the stumble in stocks is quickly being erased because - BTFD on any govt spending!?