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Tax Plans Don't Matter for Stock Behavior, Jim Cramer Says

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Will raising taxes on the rich hurt stocks?

Cramer says no.

"There's a fundamental misunderstanding between tax policy and the stock market's direction. We keep thinking that it's incredibly odd that the stock market could romp during President Biden's first 100 days given how he is attempting to raise taxes pretty meaningfully for the rich, the millionaires and above, and therefore the stock market has to go down," he wrote in his Real Money column.

"The first misunderstanding? The owners of stock. We know that probably about 55% of stock is indexed and an index owner is not a renter. We have tens of millions of people who own stock, but they own it until they can't, until they have to take distributions. Even then, amazingly, we have not seen the pressure, the natural pressure from retiring baby boomers. They just don't seem to be sellers, and the ones who have turned 72, when you are supposed to pull out money, haven't hurt the market on their exit. If you didn't know better, they take the money out and put it back, perhaps in a plain old non-tax advantaged account," Cramer continued.

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