[Source: The Associated Press]
A report that President Biden will propose a hefty tax increase on the gains wealthy individuals reap from investments triggered a stock market sell-off Thursday afternoon that left indexes broadly lower.
Investors who earn $1 million or more would have to pay a 39.6% tax rate on any capital gains, nearly double the current rate for Americans in that income bracket, according to the report by Bloomberg.
A separate surtax on investment income could boost the overall federal tax rate for wealthy investors as high as 43.3%, the report said, citing unnamed people familiar with the proposal.
The S&P 500 fell 0.9%, wiping out an early gain. The benchmark index gave up nearly all of its gain from the day before, leaving it on track for its first weekly loss in five weeks.
The selling was widespread, with every sector in the S&P 500 closing lower.
Technology stocks, banks and companies that rely on consumer spending, accounted for much of the skid. Treasury yields held mostly steady.
The S&P 500 lost 38.44 points to 4,134.98. The Dow Jones Industrial Average fell 321.41 points, or 0.9%, to 33,815.90. The Nasdaq slid 131.81 points, or 0.9%, to 13,818.41.
