We have a President who doesn’t understand basic math. He thinks 2+2 is 80. And his stupidity on math–and economics—will cost the nation for decades to come.
Thursday, we learned from Bloomberg News that the President is considering doubling capital gains taxes from the current 20% to 39.6% on ‘wealthy’ Americans. The effects on the stock market were immediate. The S&P 500 fell 38 points. The Dow lost 321. And the Nasdaq dropped 131 points.
Meanwhile, the pain could grow steadily worse. UBS predicts that the higher tax on investments will depress tech stock valuations, for example, by 7%.
Biden claims his policies will only effect people earning $1 million or more. What he forgets, of course, is that many people are invested through the stock market — even if only modestly through their retirement plans. And, this policy, which clearly has not been thought through by anyone who wants to see the American economy grow instead of shrivel, would result in massive amounts of cash coming OUT of U.S. companies. The exodus of funds would hurt average Americans’ investment savings as well as the companies that employ so many Americans.
At present, the current tax code treats investment income as investment rather than labor. As such, investors pay a lower rate. The thinking is — investors have already earned the money (likely through labor) and thus, already paid tax. When they choose invest, they take a massive chance — but, we want them to take that chance, right? Because when they risk their money, it help support industry.
The obvious effect of Joe Biden’s dumb idea of higher taxes on investment income will be less money being invested in U.S. companies.
The President likes to thinks this is only going to hurt the millionaire class. He’s quite wrong. A tax hike like the one he’s about to propose will decimate the country.