unusual_whales @unusual_whales – 9:37 UTC · Apr 7, 2025
Trump: We're on track to fully eliminate capital gains tax in 2025
I see two ways to do that. Congress could make a law that would eliminate capital gain taxes. It will also have to find money to replace the new hole in federal income. Alternatives are to raise other taxes, to borrow more or to cut defense spending and/or social social security.
There is luckily a different way to eliminate capital gain taxes. Just make sure that no capital gain is made.
bigger
Looks like Trump is trying his best to achieve that:
But there are also other possibilities. In terms of short-term, high intensity crises these are the ones to look out for. I am NOT saying these are likely. But they are there and here are some of the signs to look out for:
Rather than investors piling into Treasuries driving the price up, instead, we could see investors selling Treasuries en masse. There are two possible scenarios, one is more fin-fi than the other.
One very real scenario, which played out in March 2020 (Shutdown), is that investors around the world are desperate to get hold of liquid dollars.
…
At this point we would expect to see the Fed step in, not just to lower interest rates, as is now commonly expected, but do more drastic interventions.
…
But let us indulge the fin-fi impulse for a moment. What if providing liquidity does not cool the panic? What if investors, both American and foreign decide, that they no longer wish to hitch their wagon to the empire of the mad king? What if they decide that the US is indeed exceptional, but that it is exceptional in rather nasty ways? […] Well in that case, holding billions in dollars newly created by the Fed does not give you the security you want.So you sell the dollars. You just want out of the mad house.
This, Ladies and Gentleman, would be the truly big disaster. It would be a sell out not just of US stocks. Not just of US fixed income. But of dollar assets tout court. This would be the long heralded crisis of the dollar.
The chance for the last to happen is still low. But there is a nonzero chance that it could happen.
It would eliminate capital gain taxes – by pushing gains to zero.