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History says Biden's planned capital-gains tax will put immediate selling pressure on stocks, according to Goldman Sachs | Markets Insider

10/18/2020 4:22:00 PM

History says Biden's planned capital-gains tax will put immediate selling pressure on stocks, according to Goldman Sachs

Drew Angerer/Getty ImagesJoe Biden's planned capital-gains tax may put immediate selling pressure on stocks, according to Goldman Sachs.In a Friday note the firm explained that the last capital-gains tax hike in 2013 sparked a stock sell-off worth roughly $100 billion from wealthy individuals.

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However, those individuals who sold quickly bought back stocks only a few months later, leading Goldman to conclude that the household selling around tax hikes will be"short-lived and fully offset in the subsequent quarters."Visit Business Insider's homepage for more stories

.Biden's planned capital-gains tax hike may put immediate selling pressure on stocks given what's happened in markets after previous rate increases, according to Goldman Sachs.A team of Goldman analysts led by Arjun Menon wrote on Friday that Joe Biden's proposed changes to the corporate tax code would be complemented by an increase in the tax rate applied to capital gains and dividends for the highest income individuals.

History has shown that capital-gains tax hikes spark stock sell-offs. After the last capital-gains tax rate increase in 2013, the wealthiest 1% of households sold 1% of their starting equity and mutual fund assets, worth about $100 billion today, in the three months leading up to the rate hike, according to Goldman. As of 2020, the wealthiest 1% of Americans own 53% of all household stocks. Their collective actions can move markets.

Read more:Buy these 7 unheralded stocks right now for near-term upside of at least 25% as growth accelerates to a new level, RBC saysWhile this selling may be a downside risk to stock allocations in 2020, Goldman said it will not result in a long-term sell-off or slowing economic growth.

In the months following the 2013 rate hike, the top 1% bought back more stocks than they had sold prior to the change, said Goldman. Their reduction in stock exposure was only temporary, and Goldman said it believes that same pattern is likely to occur again.

"We expect household selling around capital-gains tax rate changes should be short-lived and fully offset in the subsequent quarters," Goldman wrote.In fact,, even with a"blue wave" election outcome. Read more: Business Insider »

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Several Trump tweets instigated bigger selloffs. 👍👍👍👍 This means absolutely nothing to 60% of Americans 🤷🏾‍♂️ Joe Biden as president will kill the economy just at a time it needs to get going again. Then he will go after your vehicle that you have worked hard to pay for. Taxing anyone for 40% for anything is insanity.

'However, those individuals who sold quickly bought back stocks only a few months later' Seems like Goldman Sachs should be guiding folks to not get emotional and hold onto stocks. 🔥 Check It Out 🔥 Probably not the best tax to increase. A 1% sales tax increase could offset this instead. good boy

Goldman says Biden capital gains tax hike could trigger some stock selling, but it won't lastNew for subscribers: Goldman says Biden capital gains tax hike could trigger some stock selling, but it won't last Check out CNBCPro today. Pro Capital gains effects every Robinhooder Pro Right, it won't last because the companies will leave. Problem solved Pro THAT is how we know it WILL last!: We start hearing appeasing voices, load and frequently, that it will not. Result? It ends up the opposite!!

If Biden wins, experts expect to see the first woman Treasury secretary in historyIf Joe Biden wins the election, he is likely to make history by appointing the first woman Treasury secretary, experts say. Sen. Elizabeth Warren and Fed Gov. Lael Brainard are already on the speculative short-list. elizabeth warren? really SMH And the marketwatch saga to push Biden's campaign continues. Trump said he will drain the swamp, hired Mnuchin from Goldman Sachs 😳

TV Ratings: Biden Leads Town Hall Duel With Trump in Early NumbersPresidential candidates Joe Biden and Donald Trump appeared in directly competing town halls on Thursday night, after the President dropped out of the second debate. Trump’s hourlong appearan… The way Trump reacts to ratings of last night's town halls will be the same way he'll react to election results. He'll deny facts He'll play the victim He'll blame others He'll call the results into question Most worrying, he'll claim victory We need a landslide. VoteHimOut. JusticeForJohnnyDepp

Is anything keeping the Biden campaign awake at night?“The intent in the [Biden] campaign is to not worry so much about what could happen, but what they are going to do each and everyday,” mikebarnicle says. “And that’s run like an underdog.” mikebarnicle No, because the lib media has his back and is actively suppressing coverage of Biden’s lies and crimes Morning_Joe mikebarnicle I believe the Clintons are just a tiny bit more corrupt than the Bidens. But it's a close call. The jury is still out.

Why tech giants limited the spread of N.Y. Post story on BidenFor the first time in recent memory, Facebook and Twitter enforced rules against misinformation on a story from a mainstream media publication. Here's why. They fucking bitch THEY STOPPED IT BECAUSE IT WAS TRUE. FACT TRUMP FARTS AND DEMS WANT TO IMPEACH HIM. FACT JOE IS A CRIMINAL , FACT I just love the NY Post! It fits the bottom of my birds cage perfectly, and its super-absorbent!!

Where Trump and Biden Stand on Financial Regulation Joe Biden was vice president when Barack Obama signed the Dodd-Frank financial regulation act in 2010. In a second term, Trump would continue efforts to ease its restrictions. Biden would likely build on it. YES LETS GET BACK TO OBAMA ERA OPEN BORDER / 9 TRILLION DEBT / BAD TRADE / CLOSING FACTORIES / OPIOD EPIDEMIC AND WAR ON COPS. Good! Knee jerk politicians. They make laws after the fact. Which then ruins everyone going forward.