The Stock Market took a sharp turn downward after news broke that President Joe Biden planned to hike capital gains tax to 43.4 percent for top earners, Breitbart News reported.
Talk of the almost 100 percent increase broke on Thursday, according to Bloomberg, who also reported that U.S. stocks fell in nine out of 11 sectors overall.
The S&P lost all its gains of the day and closed down .5 percent, while real estate and health care managed to maintain their territory by hanging onto an overall positive outcome.
The announcement explained that a rate of 39.6 percent would apply to wealthy taxpayers with incomes over one million dollars, and when combined The 3.8 percent investment income tax that funds part of Obamacare would also apply, bringing to top rate to 43.4 percent according to Breitbart.
Biden also announced that he is leaning toward the idea of raising the tax rate for those making more than $400,000 to 39.6 percent
This would increase from the reduction that took place in Trump’s Tax Cuts and Jobs Act which took the rate to 37 percent down from 39.6 percent, which is where it had been since 2013.
“Capital gains rates apply when an asset—such as a house, shares of stock, a business—that has been held over a year are sold for a gain,” Breitbart News reported.
“The current capital gains tax rates are 0 percent for a married couple earning less than $80,000, 15 percent for couples earning more than $80,000 and less than $496,000, or 20 percent for wealthier households.”
The new proposed rules would additionally mandate that a married couple filing jointly must pay the investment income tax of 3.8 percent if their combined income crosses the $250,000 threshold.