U.S. President Joe Biden is planning to increase the capital-gains tax rate for individuals earning more than $1 million a year to 39.6%, almost doubling it.
He is a supporter of equalizing capital gains and income tax rates for the wealthy as he considers the fact that some rich individuals pay lower rates than middle-class workers unfair. An approximate $1 trillion will go to funding for childcare, universal pre-kindergarten education and paid leave for workers. The news had an immediate effect on most markets with prices fluctuating significantly.
Stocks posted the highest loss in more than a month and the S&P 500 was down 0.9% at its close. Ten-year Treasury yields also fell during the trading session.
Gold & US Dollar
Gold increased on Friday morning in Asia and was set to close its third consecutive week with gains.. The U.S. dollar declined as the benchmark 10-year Treasury yield fell
Bitcoin declined again extending its losses to seven times in eight days. The cryptocurrency fell as much as 5.8% to about $48,596. Some analysts had warned of a potential decline after the digital coin fell back from its $64,870 record high on April 14 and took out key technical levels. They are now expecting further declines.
One of the biggest concerns for Bitcoin is that with U.S. investors in the digital asset already facing capital gains tax if they sell it after holding it for longer than a year, the big jump in tax could cause large sales. Analysts believe that investors will not abandon their positions altogether, but people with lots of money invested could be getting much less back.
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