In the US, a “tax on the stock exchange” may enter into force. The point is that the authorities initially want to tax unrealized gains on shares. This is suggested by Janet Yellen, nominated for the post of US Treasury Secretary.
Yellen said it was possible to introduce a tax on unrealized capital gains, including of course the stock exchange. For now, we do not know the details of this new tax draft, but it is to be based on the mark-to-market method – an accounting method in which the current market price (instead of book value) is used for the valuation of assets.
The mistake may have broader support among the US elite. Already in 2019, Senator Ron Wyden, who recently became the head of the Senate’s finance committee, spoke about such a solution. Back then, there was talk of a tax rate of up to 37%.
Responding to Yellen’s words
Billionaire investor and founder of Oaktree Capital Howard Marks told CNBC that Yellen’s idea was impractical and could do great harm to the capital market.
– If this idea is implemented, it will hit the stock market and investors’ moods a lot. Being an investor will become an unattractive activity from a tax point of view. Such a tax will indeed be difficult to avoid, but also very harmful to the market – He said.
As he added, the regulations may mean that the capital that will be “scared away” from the stock exchange will have to go somewhere.
– But where will he go? – asked the investor. We will suggest: maybe on cryptocurrency exchanges.
However, this is not the end of Yellen’s announcement. She claims that taxes for the richest and corporations will go up. President Joe Biden, in turn, calls for continued budget spending because he believes the benefits will exceed the costs of increasing taxes.
Yellen also admitted that the treasury would become “More developed, more powerful, able to react quickly, it will fight aggressively against global warming and unfair competition from China.” In her opinion, without such measures to stimulate the economy, we must expect a long and deep recession.
There are many indications that a New Deal 2.0 will be created in the USA. Let us add that the “one” in the 1930s in practice only extended the duration of the crisis.