[ad_1]
Wall Street stock markets weren’t ready for Trump’s surprise victory four years ago, but they flew under his rule, and months ago the markets weren’t ready for Biden’s victory , in particular with its ambitious tax plan. The equation is simple and clear: higher taxes lead to lower inventory.
It’s no secret that Biden’s policy is based on increasing corporate income tax from 21% to 28% and doubling the tax on profits earned by U.S. branches outside of U.S. borders at 21%. This is in addition to the imposition of a tax of at least 15% on the registered income of large companies.
But recently, with the announcement of huge spending plans by the Biden campaign, the situation has differed slightly in his favor. Biden pledged to spend $ 700 billion on infrastructure, $ 775 billion on child care, in addition to the $ 2 trillion he would spend to fight climate change, in addition to a stimulus package. ‘trillion dollars to combat the effects of Corona.
This balance makes tax fears equal the benefits of promised generous spending, so expectations have turned neutral for market performance should Biden win. That’s what America’s biggest bank, JP Morgan, concluded in its latest forecast released a week before election day.
The US bank expected the S&P 500 index of US stocks to maintain current levels if Biden wins, but expects the index to jump 14% if Trump maintains his place in the White House.
The president wants to reduce taxes on wages, especially those of middle-income Americans, and encourages tax cuts on capital gains realized on the stock market.
However, it should be noted that the identity of the president is not the only one that will determine the direction of the stock markets, because a fully democratic or fully republican Congress is different from a divided Congress! This will play a role in how easy or how difficult it is to push through whatever laws and stimulus packages the winning president comes up with, whoever he is.
Source link
