US stocks trade mixed as investors mull proposed capital gains take hike

US stocks trade mixed as investors mull proposed capital gains take hike

US stocks were mixed on Friday after falling the day prior on fears of the capital gains tax hike proposed by president Joe Biden that would nearly double the capital gains ta for wealthy Americans.

Investors are now analyzing the implications of the proposed higher taxes and what will this mean for the financial system. David Bahnsen, chief investment officer, The Bahnsen Group, a wealth management firm, said Biden's plan will have a negative impact on the stock market, though it is as yet unclear how big an impact it will have.

"If the stock market really started to believe that the capital gains tax would double in 2022, it's entirely possible that there would be an acceleration of selling towards the end of this year and into early 2022," he told Insider.

Bahnsen added that raising capital gains taxes is a disincentive for investors to sell their stocks at the appropriate time.

"Not selling an asset that should be sold due to fear of taxes is distortive to markets," he added.

But congress is likely to settle on a much more modest increase in capital gains tax than Biden would like with the eventual figure likely to land at around 28%, analysts at Goldman