Biden’s tax plan sinks U.S. stocks

Stocks on Wall Street sank across the board Thursday on reports that President Joe Biden plans to nearly double the capital gains tax on the wealthy. Sources say Biden will propose hiking that rate as well as the marginal income tax rate to almost 40%.

The tax hikes, according to sources, would fund about $1 trillion in investments in childcare, universal pre-K and paid leave for workers.

The news pressured stocks. The Dow lost more than 320 points. The S&P 500 and the Nasdaq both fell about one percent.

RegentAtlantic Investments Co-Head Andy Kapyrin said higher capital gains taxes could hit some of the market’s most popular stocks.

“It might make certain investment investments winners versus losers. A lot of people have substantial capital gains in stocks like Apple, Microsoft, Amazon, things that they bought, say, five years ago that have quadrupled went up.”

Those three tech titans and Tesla were among the leading decliners Thursday. American Airlines was also among the top losers on the S&P even though it and Southwest expressed optimism over a recovery after reporting quarterly losses that were smaller than expected. Southwest shares also declined.

After the bell, shares of Intel fell despite forecasting quarterly revenue that topped analysts’ targets. The chipmaker is betting on demand for its new generation of processors for data centers and PCs.