Wall Street Closes in Red on New Tax Concerns

The New York Stock Exchange (NYSE) declined on Thursday, closing on sharp losses that marked the worst daily performance on Wall Street since early March.

News about U.S. President Joe Biden preparing a new proposal to tax the wealthiest Americans and raise the capital gains tax to fund public expenditure of about $1 trillion on childcare and universal pre-kindergarten education.

Media reports suggested that the new plan by the Biden administration suggests nearly doubling the tax rate on capital gains for those making more than $1 million a year from a current base rate of 20% to to 39.6%. The tax hike will be couples with the current surtax on investment income.

This means that the wealthiest investors could pay a tax rate as high as 43.4%.

The Dow Jones Industrial Average dropped by 321.41 points, or 0.94%, to close at 33,815.90 points.

Meanwhile, the S&P 500 lost 38.44 points, or 0.92%, to finish at 4,134.98 points.

The Nasdaq Composite Index dropped 131.81 points, or 0.94%, closing at 13,818.41 points.

The decline comes despite positive economic data in the United States.

Earlier today, data showed that new initial jobless claims in the United States declined to their lowest level in 13 months last week. The number of U.S. citizens who applied for unemployment benefits declined by 39,000 to a seasonally adjusted level of 547,000 in the week ended April 17. This is the lowest level for new jobless claims since mid-March 2020, according to data by the U.S. Department of Labor.

Data helped strengthen the U.S. Dollar (USD), which rose against major currencies after recording earlier losses.

The Dollar Index (DXY), which measures the greenback against half a dozen of international peers, is up by 0.14% at 91.28, nearing its highest closing level in four days.