Biden reportedly planning first major tax hike since 1993 in next economic package Spending bill could include hikes in

[md2018]

Curious what investors think about the new proposed stimulus/tax increase. The President is planning a new $4T stimulus but planning to raise taxes to cover about $2T of the cost. Will the stimulus run the market up or with a corporate tax increase or lead to a sell off and possible recession?

[Scarfinger]

No body knows but I am sure you will find plenty with an opinion.

I figured that Trumps tax cuts would at least be allowed to expire in 2025. And it wouldn't surprise me if taxes were raised by Biden to pay for the stimulus packages. Only time will tell what will happen to the market. But historically the market has gone up over time. Some of us may be lucky and catch a buying opportunity if the market tanks. Personally I won't spend to much time thinking about this.

[VAmanBulls]

Wait, WHAT?? Biden is talking about raising taxes. This is indeed a shocker! Okay, so we've been talking about this. It's not a shocker at all considering Biden said he would reverse Trump's corporate tax initiative. The debate will continue as to if this is a good thing for the country and economy or not. But elections do have consequences. I don't have time to debate. My forecast is that the capital gains changes will push some selling. The changes will also impact corporate earnings. For the S&P, the current forward PE ratio is up to 21.9X this week. The five year average is 17.5X. The market is forward looking, and will start plugging in the corotate tax rate impact on earnings (and projected earnings). Here's the math: (2022 no tax change) $205 X 20 = 4,100 S&P target price (2022 tax change) $175 X 20 = 3,500 S&P target price.

[Tomanyiron]

... Will the stimulus run the market up or with a corporate tax increase or lead to a sell off and possible recession?

The market is answering that question for us.

[stilljammi]

... Will the stimulus run the market up or with a corporate tax increase or lead to a sell off and possible recession?

The market is answering that question for us.

Well luckily you locked in that -0.5% gain for the year!

[bloobs]

Curious what investors think about the new proposed stimulus/tax increase. The President is planning a new $4T stimulus but planning to raise taxes to cover about $2T of the cost. Will the stimulus run the market up or with a corporate tax increase or lead to a sell off and possible recession?

I have not (yet) run across studies that prove that raising corporate tax rates would lead to a recession.
Actually, my research led me to the opposite assertions:
1. That recessions subsequently lead to tax increases of all types (https://www.cbpp.org/research/state-tax ... y%201990s.)

2. That corporate welfare does not work: https://www.americanprogress.org/issues ... trickling/.

Regardless, if the government has to spend beyond its means, I say I'd rather that most Americans (e.g. middle and lower class) who will spend it back into the economy receive the funds directly than to the anyone else (corporations and top 1%) who will likely hoard it, right?

[IRQVET]

The dems never met a tax or a law they didn't like. Case in point look at California. Was once a great place to live and raise a family, but those days are long gone. There are still nice places there, but as whole, that place has been circling the toilet for some time now.

So its not suprising. . . have to pay for all that free stuff somehow. Too busy taxing and litigating themselves into prosperity.

[Aitrus]

I like the OP's question and subsequent discussion. Just wanted to drop in and leave a friendly reminder to keep it on the topic of how it relates to investing and the markets. Let's not devolve it into politics - we've been doing a great job over the past few months with regards to avoiding politics, so I'd prefer if we kept it that way.

[amybelieve]

I miss all the comments about everyone's strategy and their number and when anyone is moving their money,,, I couldn't figure out how to start a new topic, so sorry Aitrus.