The President of the United States will be able to increase the profit tax rate for the wealthy to more than 40 percent.
Financial markets in the US moved somewhat sideways Thursday night, but after Bloomberg wrote that President Joe Biden would increase the tax on capital gains to 43.4 per cent, it significantly affected major US indices.
Here’s what the three look like at the close on Thursday:
- The Dow Jones Index decreased by 0.94 percent
- Nasdaq is down 0.94 percent
- Standard & Poor’s 500 fell 0.92 percent
Bloomberg also writes that the tax increase will apply to people earning $ 1 million or more.
This could mean that gains taxed, for example, from sales of stocks or homes may have to be taxed higher than the regular income tax, and are more than double the current rate.
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The highest tax for the wealthy in California
The new tax policy was an important issue for Biden during his presidential campaign, as he believed that a step like the one now proposed would be able to smooth out the differences between the wealthy, the middle class, and the working class.
The reason is that Democrats have argued that the wealthy more than others make money through investment returns rather than traditional wages.
According to Bloomberg, the tax increase will have different impacts in different states due to different tax policies, and since there is a state and national tax on profits. California is the state that comes first, and those who earn more than a million will be taxed at 56.7 percent.
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The number of vacancies is lower than expected
Before the opening hours, the US Labor Department released the latest unemployment numbers (Unemployment Claims). A total of 574,000 Americans applied for unemployment benefits for the first time last week. There are fewer than expected 617,000 people, according to a consensus estimate from Direkt Makro.
Otherwise, the results season is underway on Wall Street. After closing tonight, Intel and Snap are on their way.
American Airlines and Southwest Airlines have already submitted their results during the day. Both are up from the start, 1.05 and 1.74 percent, respectively. American Airlines reported its fifth straight quarter with a loss, while Southwest reported a profit CNBC.