Investors selling stocks in response to the Biden government’s alleged plan to raise taxes on investments are making a mistake, CNBC’s Jim Cramer said Thursday.
“Please do not be afraid of the tax officer. Do not determine where a stock comes from, just think about where it could lead,” said the host of “Mad Money”, shaking off the chances that the Proposal would come through Congress is.
Stocks fell after a report from Bloomberg News said President Joe Biden might propose raising capital gains taxes on millionaires.
Believing the situation to lead to discounts in the market, Cramer takes the other side of the trade.
“Be ready to buy stocks battered by tax fears that have nothing to do with fundamentals, and look out for stocks with good returns when you’re desperate for tax-efficient income,” he said.
Cramer advised investors not to sell the news as the Democrats have to run politics by a slim majority through a Senate.
“I can live with taxing capital gains as normal income – we don’t want higher taxes, but I can live with it – but the idea of Biden having 50 senators to vote for it is frankly just fanciful,” Cramer said.
Reportedly, the plan would increase capital gains tax for wealthy Americans from 20% to 39.6%.