Investment Bankers’ New Pitch Is on Fear of Democratic Tax Hike

Investment Bankers’ New Pitch Is on Fear of Democratic Tax Hike

U.S. investment bankers are keen to close lucrative deals from corporate owners selling their entities in anticipation of tax hikes if Joe Biden wins the November 3 election, according to Reuters. Biden said he would raise capital gains tax to 39.6% from the current 20% for those making over $1 million. The corporate tax rate would be increased from 21% to 28%. The prospect has raised eyebrows for bankers hungry for deals.

  • Investment banker’s pitch targets individuals, families, founders, and private equity companies controlling firms and can decide when to sell them. 
  • Some businesses are concerned about the upcoming tax changes and will explore the possibility of selling some entity assets but getting the best price is the main overriding consideration for corporate sellers rather than tax savings. 
  • Sales of privately held U.S. firms totaled $253 billion in Q3, up fivefold from Q2 and up 51% from Q3 2019. 

U.S. stocks are gaining. SPY is up 0.53%

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