EDITOR'S NOTE
Stocks slumped on Thursday afternoon, amid reports that President Joe Biden will propose raising capital gains taxes on millionaires, boosting the levy from 20% to 39.6%.
The plan would reportedly keep the 3.8% net investment income tax intact, bringing the hike as high as 43.4%, according to Bloomberg News.
The S&P 500 and the Nasdaq Composite both fell about 0.9%. The Dow Jones Industrial Average gave up approximately 321 points, closing at 33,815.90.
The decline was precipitous and rapid. 
The news shouldn’t have been a surprise to investors, said Ed Mills, a Washington policy analyst at Raymond James. He spoke on CNBC’s “Closing Bell on Thursday.
“He has been saying for weeks that there is going to be a social infrastructure bill coming that is going to include increase in taxes on the top income households, the $1 million mark is there,” Mills said.
There was a silver lining to the sell-off, though. The pricy stocks investors have long coveted — and that are beloved by Wall Street analysts — were finally available at a bargain.
Strategists warned investors from jumping to any conclusions about what Biden’s proposal may look like in its final form.
Don’t forget that there’s a 50-50 split between the parties in the Senate, and the plan could change significantly as negotiations progress.
“If I want to get something done, the first thing I’m going to do is come with a really extreme request and then I’m going to negotiate back from that,” Doug Sandler, head of global strategy at RiverFront Investment Group, said Thursday on CNBC’s “Power Lunch.”
“That’s just the way politics work,” he said. TOP NEWS
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