Tough one to handicap

Tough one to handicap

Jeff Stein from the Washington Post reports that tax hikes being considered for the next bill (not final) include: -

  • Corporate rate to 28% from 21%
  • Global min tax to 21%
  • Top income rate to 39.6% from 37%
  • End fossil fuel subsidies
  • Tax investment gains greater than $1M as wage income
  • Tax assets passed on at death

Obviously this is a starting point so it will be watered down. Even the story says officials in the administration are 'exploring' those proposals.

The question is: How big of a probability do you put on any of that coming to pass? I would put it at 70% that something is coming but it's much more likely to be a 2 pp rise in corporate taxes than a 7 pp increase.

In particular, capital gains could spark some selling in equities later in the year, something I wrote about here.