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What Does A Huge Jump in Capital Gains Taxes Mean for Tech Leaders?

Published 05/03/2021, 10:12 AM
Updated 05/03/2021, 11:30 AM
© Reuters.  What Does A Huge Jump in Capital Gains Taxes Mean for Tech Leaders?

© Reuters. What Does A Huge Jump in Capital Gains Taxes Mean for Tech Leaders?

The President is looking to increase the capital gains tax for those earning over $1 million per year. With some of the top tech companies such as Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) seeing massive gains over the past year, what does an increase in capital gains mean for investors holding those stocks. Read more to find out.

  • The Biden administration wants a top rate of 43.4% for capital gains
  • Are wealth taxes next?
  • Janet Yellen promotes “global taxes”
  • Amazon, Apple, Alphabet, and Microsoft’s shareholders have massive gains
  • Does selling shares to pay Uncle Sam end the bull market?
Life creates challenges as our paths can take twists and turns based on decisions we make. The only certainties are that we will all die one day, and each year we must pay our taxes. On the campaign trail in 2020, President Joe Biden pledged that he would raise taxes on the wealthiest Americans. On Thursday, April 22, the US stock market backed off from its all-time highs are he put some meat on the tax increase bone. Capital gains appear to be the first target as he will propose over doubling the rate on top earners.

Meanwhile, stocks snapped back on April 23 and were once again near the highs. The DJIA was just under the 33,900 level, and the S&P 500 was nearly at the 4,200 level. The technology-heavy NASDAQ was just below 14,000. In 2020, the NASDAQ led the way on the upside. While all of the leading equity indices posted impressive gains, the NASDAQ was over 43.6% higher on a year-on-year basis. In Q1 2021, the technology index added to the 2020 gains as it moved over 2.78% higher and was even higher at the end of last week. At the April 30 close, the NASDAQ was up another 5.4% in April.

Four leading NASDAQ stocks are Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), and Microsoft (MSFT). Many investors have built wealth on investing in these companies with a combined over $7.53 trillion market cap. Time will tell if a substantial jump in capital gains tax rates will cause selling in these and other companies and if it marks a high in the NASDAQ index.

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