Have you noticed Washington’s newest magic trick—The Incredible Shrinking Tax Hike? Since President Biden officially released his slate of proposed domestic and global tax increases, he has spent much of his time walking them back and forward … and back … and back, wooing much-needed moderate Democratic and Republican support. At this rate he could be pitching tax cuts by late October as the new fiscal year dawns and the 2022 election cycle kicks into gear.
Pundits initially paranoid of far-flung, extreme scenarios now struggle incomprehensibly with what stocks knew all along: Sneaky legislative gridlock torpedoes huge hikes—and most controversial changes. This is the basic scenario behind Democratic presidents’ historically gangbuster inaugural-year stock market returns. It’s happening now. Let me show you.
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