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Stocks sink on worries over higher taxes




The three main indices are shown in red, with the Dow (INDU) 0.9%, more than 300 points less. He S&P 500 (SPX) fell 0.8% and the Nasdaq Composite (COMP) fell 0.7%.
No wonder Wall Street doesn’t like higher taxes, especially when it comes to capital gains: the taxes that investors pay for profits made after selling a stock, for example.

These rates look very different right now, with a federal capital gains tax in excess of 20%. People who earn $ 200,000 a year and married couples who make $ 250,000 a year also pay an additional 3.8% tax on their capital gains to help fund the Economic Care Act.

Wall Street is not impressed and the shock of these figures is hard to avoid for investors, said Edward Moya, a senior market analyst at Oanda, in a note to clients.

“The biggest risks to the stock market are the Fed’s reduced rage and aggressive tax hikes,” he said.

That said, this is just a proposal and the end product may look very different. White House Press Secretary Jen Psaki said Thursday that details of the Plan for American Families will be detailed next week during President Joe Biden’s speech in Congress, but would not confirm the details of the increase in plan taxes.

Shares remain near record highs, so these market hesitations could be a good excuse for investors to sell shares and deliver some profits, Moya added.

–Tami Luhby and Katie Lobosco contributed to this report.