The stock market may go up, down or sideways. But new tax policy—or lack thereof—will have nothing to do with it, according to Matt Lampert, Director of Research at the Socionomics Institute.
Lampert added: “Some people, including Nobel laureates, have hinted that passing tax reform is essential to supporting a bull market. Anyone who made that argument about the Tax Reform Act of 1986 surely would have been surprised when the stock market experienced its greatest crash in more than half a century within a year of the bill becoming law.”
“The major tax reform acts of the early-to-mid 1960s preceded the longest bear market in a generation, which unfolded from 1966-1982. After the passage of the Economic Recovery Tax Act of 1981, the economy suffered a recession, the stock market fell, and much of the reform was rolled back the following year. After the Bush tax cut of 2001, the bear market in progress intensified and continued for 16 months. After the 2003 Bush tax cut, the stock market’s rally continued for four years and then reversed course in the deepest bear market since the Great Depression.”
About Matt Lampert
Matt Lampert is the director of research at the Socionomics Institute, a think tank dedicated to using data on social mood to understand and anticipate cultural trends. He is a contributing author to the new book, Socionomic Causality in Politics.
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