This Tax Could Collapse the Market — And It’s Gaining Support

"the caveat is that the composition of major US Stock indices could cause us markets to fall in the short term... so when foreign investors go to sell those Magnificent Seven stocks the outcome is that the entire S&P 500 Falls even though most of the other stocks in their index are completely fine"

"American companies advocated for a clever model wherein a tax would begin at just a half a percentage point but then increase by half a percentage point every 6 months or every year until the US no longer has a trade deficit the think tank estimates that this could raise over $2 trillion over a 10-year period"

"the only problem is that foreign investors probably wouldn't be very happy about this tax and many could sell their us Assets in protest the result would be the US economy entering a deep recession because its most important industry would effectively go bankrupt before another one could step in to replace it"

"it would be unlikely to affect the markets in any meaningful way because there is nowhere else for large investors to go make no mistake there would likely be some minor redirection of capital around the margins even though this minor redirection of capital wouldn't affect us markets much it would have profound effects on foreign markets just because they're much less liquid and that means it takes less money to move the prices of their respective assets and this could result in speculative bubbles in overseas markets"

"it's going to take time to digitize the US financial markets it could take years if not more and this means it could be years before the positive effects of this new Financial system start to feed into the actual economy and something could go horribly wrong in the interim there could be a major technical issue with tokenized assets for instance and that would likely reduce investor confidence in US markets"

"the US government hit its debt sealing in January this year and US politicians are in the process of passing a quote big beautiful bill that includes a provision to raise the debt cealing if this spending bll does not get passed before the US government runs out of money it could risk causing a bond market crisis and this would reduce investor confidence in US markets and it would be a huge blow to that critical element that large foreign investors look for safe and liquid Bond markets"