Tuesday, July 28, 2015

Hillary Clinton's Policy For A Capital Gains Tax Increase And Against Stock Buybacks Is An Attack On The Wealth And Savings Of Half Of US Families

As Hillary Clinton proposes increasing the capital gains tax and riles against stock buybacks and activists investors who increase a company's market value, it is worth noting that half of Americans in the 35 to 64 age group own stock, and half of US families whose combined income is more than $40,000 a year own stock. In the 35 to 44 year old age group 54 percent own stock. An increase in the tax on stocks and an attack on stock owners is an attack on half of the US and an attack on those who are creating wealth and savings for their later years by investing during their prime working years in the stock market.

From The Wall Street Journal, Real Time Economics, "Who Owns Stocks? It’s Not Just the Rich" by Josh Zumbrun:
It might be tempting to assume that stock ownership is primarily a “rich-person problem,” but a look at the data shows that in fact it’s very common for middle-income families to own stocks, either directly or indirectly through retirement accounts. Stock ownership isn’t just for the rich, though it’s been trending that way.

Stock Ownership By Age
Source: The Wall Street Journal

Among the middle 20% of families, which earn an average of $49,600, almost half own some stocks, according to the Federal Reserve’s Survey of Consumer Finances, one of the best available sources of wealth data. Among those earning in the 60th-80th percentile, or an average of about $80,000, almost 70% own stocks.

One of the key reasons that investors favor stocks is that, over the long run, the asset has historically performed very well. Thus it’s no surprise that stock wealth grows with age. Even middle-income families who sock away some savings into the market over the course of their careers can have a substantial amount of stock wealth by the time they’re near retirement. [Emphasis added.]

Stock Wealth By Age
Source: The Wall Street Journal