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"US stocks are owned by a variety of investors – foreigners, pension funds, not for profits, and individual holdings stocks through retirement accounts like 401ks and IRAs will not bear any burden from a change in the capital gains tax rate. This decreases the likelihood of broad market implications for stocks. In fact, over the long-term changes in US capital gains taxes have not had much impact on US stocks. The most recent change in capital gains taxes took effect in 2013 – the maximum capital gains tax increased by 5% and investors were subject to an additional 3.4% levy to support Medicare. This was the largest increase in investment taxes in the post-war era, and yet US stocks rallied over 30% that year. Higher taxes may make losers out of the best performing stocks of years past. Individuals who may be subject to a higher levy could respond by booking gains sooner on investments that have been highly successful for them and diversify into other opportunities. This could add selling pressure to the most successful investments over the past five years and support for a more diversified basket of stocks."
From the Bloomberg article:
“When you raise taxes dramatically you create disincentives so that people hang on to assets longer than they might have to avoid a high capital gains tax,” he said. “That capital might have been better deployed in the next business that will create jobs.”
Utter nonsense. Encouraging long-term ownership is a good thing for the stock market and would put a damper on the casino mentality we have today. Moreover, most of the stock market activity is speculative trading of already issued shares of stock on the secondary market providing no new capital for businesses to grow.
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"US stocks are owned by a variety of investors – foreigners, pension funds, not for profits, and individual holdings stocks through retirement accounts like 401ks and IRAs will not bear any burden from a change in the capital gains tax rate. This decreases the likelihood of broad market implications for stocks.
In fact, over the long-term changes in US capital gains taxes have not had much impact on US stocks. The most recent change in capital gains taxes took effect in 2013 – the maximum capital gains tax increased by 5% and investors were subject to an additional 3.4% levy to support Medicare. This was the largest increase in investment taxes in the post-war era, and yet US stocks rallied over 30% that year.
Higher taxes may make losers out of the best performing stocks of years past. Individuals who may be subject to a higher levy could respond by booking gains sooner on investments that have been highly successful for them and diversify into other opportunities. This could add selling pressure to the most successful investments over the past five years and support for a more diversified basket of stocks."
From the Bloomberg article: Utter nonsense. Encouraging long-term ownership is a good thing for the stock market and would put a damper on the casino mentality we have today. Moreover, most of the stock market activity is speculative trading of already issued shares of stock on the secondary market providing no new capital for businesses to grow.