Dow sinks more than 300 points on worries about higher taxes

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Posted: Apr 22, 2021 3:41 PM
Updated: Apr 22, 2021 3:41 PM

US stocks are tumbling Thursday over investors' worries about higher taxes.

All three major indexes are in the red, with the Dow down 0.9% -- more than 300 points lower. The S&P 500 fell 0.8% and the Nasdaq Composite tumbled 0.7%.

It's not surprising that Wall Street doesn't like higher taxes, particularly when it comes to capital gains -- the levy investors pay on realized profits after selling a stock, for example.

The Biden administration wants to raise taxes on the wealthy to pay for the pandemic recovery. It has proposed to hike capital gains taxes for those earning more than $1 million annually to 39.6%.

These rates look very different at the moment, with a top federal capital gains tax of only 20%. Individuals earning $200,000 a year and married couples making $250,000 a year also pay an additional 3.8% tax on their capital gains to help fund the Affordable Care Act.

Wall Street is not impressed and the shock from these numbers is hard for investors to shake off, said Edward Moya, senior market analyst at Oanda, in a note to clients.

"The biggest risks to the stock market are the Fed's taper tantrum and aggressive tax hikes," he said.

That said, this is only a proposal and the final product might look very different. White House press secretary Jen Psaki said on Thursday that details of the American Families Plan will be outlined next week during President Joe Biden's address to Congress, but she would not confirm tax increase details in the plan.

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

--Tami Luhby and Katie Lobosco contributed to this report.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 1462456

Reported Deaths: 20308
CountyCasesDeaths
Marion2005922494
Lake992001456
Allen903391005
Hamilton70705539
St. Joseph63078746
Elkhart48098622
Vanderburgh46217523
Tippecanoe42115330
Johnson37119516
Hendricks35078455
Porter33900460
Madison28036530
Clark25186321
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Monroe22201243
Howard21344372
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Kosciusko17513199
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Warrick16060212
Wayne15757296
Floyd15399252
Grant14898293
Morgan13934230
Boone13172136
Noble11421140
Dearborn11355112
Henry11312201
Shelby11231150
Marshall11041166
Dubois10782152
Jackson10174104
DeKalb9944128
Cass9942142
Lawrence9914219
Huntington9823139
Gibson9131125
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Knox8762124
Harrison8718111
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Union163619
Ohio119516
Unassigned0742

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 2403645

Reported Deaths: 30922
CountyCasesDeaths
Franklin2596932036
Cuyahoga2572672998
Hamilton1666711699
Montgomery1103831586
Summit1066861382
Lucas895171149
Butler78647924
Stark747301383
Lorain62885783
Warren49934468
Mahoning49735909
Lake46850586
Clermont43541428
Delaware38876210
Trumbull38576748
Medina37611416
Licking36901401
Fairfield33848331
Greene32124416
Portage31381356
Clark30277440
Richland28251420
Wood27660289
Allen24372392
Miami22806389
Muskingum22298244
Columbiana22095399
Wayne21275354
Tuscarawas18847423
Erie18041221
Ashtabula17932338
Marion17503231
Scioto16553203
Ross16163249
Pickaway15536173
Hancock15251227
Geauga15244221
Lawrence13847186
Huron13399182
Union1329683
Belmont13255247
Jefferson12864257
Sandusky12770197
Athens11949106
Knox11511195
Seneca11454200
Ashland10795174
Darke10673196
Washington10564168
Auglaize10152141
Crawford9854175
Shelby9699155
Brown9400140
Fulton9235148
Guernsey9109115
Defiance9057134
Highland9035143
Logan8955141
Clinton8719121
Mercer8640111
Madison8568104
Preble8002160
Williams7848135
Putnam7731135
Ottawa7629120
Champaign7556112
Jackson7383114
Perry714598
Coshocton7043136
Morrow694580
Fayette662287
Hardin6219125
Pike617086
Gallia594989
Adams5779124
Van Wert5779120
Henry565592
Hocking5521103
Carroll4828100
Wyandot482289
Holmes4747161
Paulding401163
Meigs375071
Monroe299368
Noble279851
Harrison279461
Morgan276848
Vinton239845
Unassigned08
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