In a word, Biden, the U.S. stock market has dived!This time specifically for rich Americans

In a word, Biden, the U.S. stock market has dived!This time specifically for rich Americans

China Times (www.chinatimes.net.cn) reporter Shuai Kecong and Chen Feng reporting from Beijing

Due to President Biden’s plan to substantially increase capital gains tax, the US stock market plunged sharply on April 22 (Thursday), and the three major stock indexes closed lower across the board.

According to a US media report at noon on the 22nd local time, Biden intends to propose a plan to substantially increase the capital gains tax rate imposed on the wealthy in the United States. U.S. media quoted sources familiar with the matter as saying that for people with an annual income of more than $1 million, the capital gains tax will nearly double, from 20% to 39.6%.

Due to the sudden news, the three major U.S. stock indexes plummeted during midday and eventually fell. The US stock market index S&P 500 closed down nearly 1%, the biggest drop in nearly a month.

As of Thursday’s close, the Dow fell 0.94% to 3,3815.9 points; the Nasdaq fell 0.94% to 13,838.41 points; the S&P 500 index fell 0.92% to 4,134.98 points.

Market analysts pointed out that Biden’s proposal will essentially make the millionaires pay higher investment costs. For investors, the higher the return on investment, the more taxes they need to pay. If this proposal is finally passed, U.S. stocks are expected to face tremendous pressure, especially technology stocks, which have experienced considerable gains in recent years.

The large US technology stocks all suffered a sharp sell-off during the session on Thursday, and eventually closed down across the board. The stock prices of Apple, Microsoft, Amazon, Google, Facebook and other companies all fell by more than 1%, and Tesla’s stock price fell by more than 3%.

US media reported that Biden’s plan, if implemented, will set the highest investment income tax rate in the United States since the 1920s. The plan is part of the White House’s comprehensive reform of the US tax system to enable the wealthy and large companies to pay higher taxes. Pay for Biden’s ambitious economic agenda.

However, any tax increase plan of this kind needs to be passed by the US Congress. Biden’s Democratic Party has a weak advantage in Congress, and this plan is obviously unlikely to receive Republican support. Whether it can be passed and legislated in the end is still worth watching.

US media said that the details of Biden’s proposal are expected to be announced next week, and the content of the plan may still change. In addition, White House officials are discussing other tax increases, such as increasing inheritance taxes for the wealthy in the United States.

Before the news of Biden’s proposed tax increase came out, the US stocks digested better-than-expected economic data, and rose for a while in early trading. The U.S. Department of Labor reported on Thursday that the number of initial claims for unemployment benefits in the United States last week was 547,000, a record low in more than a year, far better than market expectations.

Also on Thursday, U.S. Democratic senators put forward a proposal worth 568 billion yuan, which covers construction of bridges, airports, roads, etc., hoping to replace Biden’s $2 trillion infrastructure plan. This shows that there are still big differences between the two parties in the US infrastructure plans, and there is no hope for the US infrastructure plans to be released in the short term.

In terms of US-listed Chinese concept stocks, the Nasdaq Golden Dragon China Index, which measures the overall performance of Chinese concept stocks, closed up 1.56% on Thursday, and most Chinese concept stocks recorded gains.

Among popular Chinese concept stocks, Alibaba and Baidu basically closed flat, Pinduoduo rose 3.61%, JD.com rose 0.52%, NetEase rose 2.22%, Shell rose 1.73%, Tencent Music and Bilibili rose 3%. NIO and Ideal Motor both rose more than 1%, while Xiaopeng Motor fell 0.71%.

It is worth mentioning that the online education company GSX, which has been short-selling frequently in the past two years, announced on the 22nd that it changed its name to “Gaotu”. A major reason for the change is that its main business Gaotu classroom revenue has accounted for nearly 90%. . After the news was announced, GSX’s stock price closed down by more than 9% on Thursday.

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