by From Dean Baker Moore said it would take the form of “the biggest sell-off in the stock market in American history.” Since stock is overwhelmingly held by the wealthy, if the market plunges, it means that wealthy will have relatively less wealth. It is important to remember that the stock market in principle represents the value of future after-tax corporate profits. This means that any measure that should increase after-tax profits, such as the Republicans’ corporate tax cut, should lead to a rise in the stock market. By contrast, measures that reduce corporate profits, like reining in abusive insurers or taxing fossil fuel companies for the damage they cause to the environment, will lead a fall in the stock market. While this would mean that rich people would have less money, it has
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from Dean Baker
Moore said it would take the form of “the biggest sell-off in the stock market in American history.” Since stock is overwhelmingly held by the wealthy, if the market plunges, it means that wealthy will have relatively less wealth.
It is important to remember that the stock market in principle represents the value of future after-tax corporate profits. This means that any measure that should increase after-tax profits, such as the Republicans’ corporate tax cut, should lead to a rise in the stock market. By contrast, measures that reduce corporate profits, like reining in abusive insurers or taxing fossil fuel companies for the damage they cause to the environment, will lead a fall in the stock market.
While this would mean that rich people would have less money, it has little to do with the health of the economy.