In what we are sure will be considered 'election meddling' at best, or at worst, the greatest institutional-to-retail distribution - at record high valuations - ever; CNBC reports that as part of a forthcoming package of proposed tax cuts, the White House is considering ways to incentivize U.S. households to invest in the stock market
The proposal, one of many new tax cuts under consideration, would see a portion of household income treated as tax-free for the purposes of investing outside a traditional 401(k). Under one scenario, a household earning up to $200,000 could invest $10,000 on a tax-free basis, although officials noted these numbers are fluid.
“Nothing’s ruled out,” said one senior administration official. “Nothing’s been ruled in, either.”
After the Great Recession, the percentage of American households owning stocks fell to 52% from 62% before the crisis, according to Gallup. That percentage reached 55% in 2019, a year when the stock market hit record highs.
The tax break, if enacted, would represent “a pretty substantial amount of money for people” to have for retirement, according to Stephen Moore, economist at the conservative Heritage Foundation and close confidante of the White House.
"That’s the type of thing that would expand ownership,” Moore tells CNBC.
Given President Trump's obsession with the level of the stock market, we can't help but be a little skeptical of the timing. As we recently notes, Goldman pointed out that the top 1% starts dumping just as economy enters recession...
...and the bottom 90% starts buying just before the recession begins...
It would appear President Trump is betting it all on the stock market...
...and White House economic adviser, Larry Kudlow has claimed this will be released by September, ahead of the election, but of course would need Congress to agree - which they wouldn't... because that would be "election meddling," of course?
Any tax cuts would need congressional approval to take effect, a tall order while Democrats have the majority in the House of Representatives. For that reasons, officials described the proposal that would be made public as “conceptual in nature.”
“It’s sort of an idealistic document,” said a senior official involved in discussions. “If you reelect this administration, this is what you’re going to get.”
We can't wait to hear how Congressional Democrats will refuse this and "deny the working man and woman and non-gender-binary citizen the chance of participating in the American Dream."