Loading ...Calendar years in which tax hikes went into effect have historically coincided with double-digit S&P 500 price returns
Earlier this month, Joe Biden unveiled his Made in America Tax Plan, which proposes an increase in the US corporate tax rate to 28% from 21% which was followed by a Bloomberg report that the capital gains tax would be hiked to 39%. And while the tax plan and all of its details are unlikely to pass through Congress in its current form, the prospect of higher corporate taxes has immediately translated into angst among investors based on numerous client conversations (such as those of Goldman), despite historical market data indicating that changes to the corporate tax code should not be feared. In fact, a recent report from BMO’s Brian Belski shows that calendar years in which tax hikes went into effect have historically coincided with double-digit S&P 500 price returns and stronger US GDP growth, on average.
{At market tops bullish arguments are numerous and irrefutable–their logic is iron clad….ditto for bearish arguments at market bottoms]