Two days ago I made the video you will see at the bottom of this post that verbally lays out what Bloomberg put out yesterday after a report was released regarding Biden’s tax plan. The Bloomberg article is below and so is my video. I was perplexed when I saw the Dow lost 320 points, as if this was a big surprise.
My understanding is that there was a surprise for many money managers in that the report on Biden’s tax proposal had laid out that any household making more than $1 million would be subject to these new capital gains tax rates. This is in contrast to what many beleived, which was: That an actual capital gain on the investments would have to be more than $1 million in order to trigger the higher tax. Clearly, the group of people making more than $1 million in income is larger than the group that will have an actual capital gain of more than $1 million in a year.
Regardless of the reasoning for the “shock and awe”, I think it is clear that tax rates will be rising and educating ourselves on what the changes will likely be is important. In my video I lay out some strategy in addition to the details. This strategy speaks to the question that I have received from a few of my friends of, “do I wait until December 31 then sell my stocks?”.
