The problems with President Trump’s latest stock market idea

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Bubble, bubble toil and trouble

President Trump loves the stock market — especially when it is going up. But there’s really no way of guaranteeing that stock prices will continue to climb between now and the presidential election in November — unless, of course, the rig is in. Considering how important the market is to the president , it’s not surprising that this idea is being considered: letting people treat a portion of their income as tax-free if the money is invested in the stock market. One version being considered, it was reported late Friday, is that households earning up to $200,000 could invest $10,000 on a tax-free basis in stocks. That would be over and above the amount of tax-free money people can already put into a 401(k) retirement plan and invest anywhere they want. Stock prices were headed for a substantial loss on Friday before word leaked out that this was being considered. The losses were minuscule by the time the market closed for the long holiday weekend. What does this idea accomplish? That’s easy. It might keep stock prices elevated — at least long enough to help the president . Even if the proposal isn’t enacted, just the idea that it is being proposed will help Wall Street. What’s wrong with this proposal? In the first place, only 52 percent of Americans play the stock market. That figure is down from a peak of 62 percent before the Great Recession. So only half of Americans (or the voting population […]

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