America's billionaires have unloaded $42.9 billion in stock through the start of December, more than double the $20.2 billion they sold in all of 2020, according to the Bloomberg Billionaires Index.
Why are billionaires selling off their stocks?
One plausible explanation is that this is how they plan to pay their upcoming tax bills in the new year.Last month, the House of Representatives passed a superwealth surtax of 5% on income over $10 million and 3% more if it tops $25 million.
The surtax — which would take effect in 2022 and still has to make it through the Senate — applies to capital gains, meaning cashing out stock holdings would be pricier. In other words, billionaires have two more weeks to save up to 8% on their tax bills.
Another factor driving sales is that the Fed has to step in to cool down the overheated economy with tapering, could billionaires be selling off their stocks at the “top” before a market crash?
Also,billionaires could have a variety of personal reasons for selling now, including funding charitable endeavors, like Jeff Bezos.
Mooers, what do you think about the recent billionaire selloffs?
Source: Bloomberg, CNBC