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Goldman Reprises Democratic Tax-Hike Worry After Stock Surge

  • Strategists say it could reduce S&P 500 EPS by 12% in 2021
  • Stocks like Charles Schwab, Visa could be vulnerable: Kostin
New York Prepares As Covid-19 Cases Surge
Photographer: Gabby Jones/Bloomberg
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Now that U.S. stocks are solidly back in black, the economy is reopening and infection rates are down, strategists are reviving concerns about the Democratic party’s policy platform.

“Presumptive Democratic nominee and former Vice President Joe Biden has proposed partially reversing the 2017 TCJA,” Goldman Sachs Group Inc. strategists led by David Kostin wrote in a June 5 note, referring to the Tax Cuts and Jobs Act. “If enacted, this tax reform would reduce our S&P 500 earnings estimate for 2021 by roughly $20 per share, from $170 to $150.”