On Thursday, stocks took a nosedive after Bloomberg reported on the Biden administration’s plans to increase capital gains tax for wealthy individuals. Amid the stock market shock, White House Press Secretary Jen Psaki defended the administration’s reported tax hike plan.
Psaki said that the wealthy could afford the tax increase.
NEW: Biden to propose almost doubling the capital gains tax rate for the wealthy to 39.6%. Coupled with an existing tax on investment income, that means that federal tax rates for investors could be as high as 43.4%.
Markets turned lower on the report https://t.co/CX8xNcCNkz
— Bloomberg (@business) April 22, 2021
Psaki on tax hike: ‘The wealthiest Americans who can afford it and corporations and businesses who can afford it’
According to Psaki, Biden increased government spending on childcare, infrastructure, and free pre-school to the tune of trillion was worth it.
Psaki told reporters, “His view is that, that should be on the backs, that can be on the backs of the wealthiest Americans who can afford it and corporations and businesses who can afford it.”
Immediately following the Bloomberg report detailing Biden’s possible 43.4 percent capital gains tax hike for the wealthy, the Dow Jones Industrial Average dropped more than 250 points.
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By the end of Thursday afternoon, the Dow had plunged 400 points. The S&P 500 and Nasdaq also erased gains to trade at session lows.
BREAKING: Stocks sharply drop to new session lows; Bloomberg reports President Biden will propose a capital gains tax as high as 43.4% for the wealthy. https://t.co/G2vjJUIJ82 pic.twitter.com/6N6hwRWBtl
— CNBC Now (@CNBCnow) April 22, 2021
Psaki: ‘His view, and the view of our economic team, is that won’t have a negative impact’
When asked about the tax hikes, Psaki did not deny reports but said the administration was still hammering out the final details of Team Biden’s plan.
She noted Biden supported the idea of boosting taxes, but with a threshold.
Psaki insisted that Biden would not raise taxes on those making under $400,000 a year.
Psaki said, “His view, and the view of our economic team, is that won’t have a negative impact.”
Psaki was obviously coy on Thursday about how the Biden administration’s new tax policies might affect the American economy overall.
But silence on certain fronts speaks volumes. It will be interesting to see how much this administration will admit about the potential detrimental affects their polices might have moving forward.
Expect Jen Psaki to navigate that political minefield the best she can, and to dodge the truth wherever necessary.
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