The Prospect of higher taxes scares Wall Street and the rest of the market

The European stocks point to a lower opening after the falls seen last night in Wall Street. It followed the aggressive increase in taxes Biden is pursuing. The new Administration intends to double the taxes on capital gains for those citizens with an income greater than one million dollars.

The New York Stock Exchange experienced its worst day of the last five weeks yesterday. It led the S&P 500 to end the session with its biggest fall since March 18, after knowing the intentions of the president of the United States regarding taxes.

Biden wants to tax the rich

The new White House tenant plans to finance the high budget of the stimulus and infrastructure plans announced in recent months with aggressive tax reforms that could double the pressure on higher incomes.

As it became known yesterday afternoon, the Democratic leader aims for taxes on capital gains to double from 20% to 39.6% for those citizens who earn more than a million dollars a year. In practice, this would mean that total rates on returns on capital would reach 52.22% for New York citizens and up to 56.7% for California residents.

As expected, the news has choked investors and has caused the correction seen last night on Wall Street and has also been replicated in the Japan Stock Exchange. The rest of the squares in Asia have managed to remain oblivious to this corrective in the United States. Still, the European markets are not having so much luck, and the main references of the Old Continent are trading with falls of less than a quarter of a point.

However, the day’s schedule includes a whole series of relevant local references, such as a new wave of business results and the composite PMI data for the eurozone. Analysts expect the indicator for April to stand at 52.8 points.